The bankruptcy court has approved a proposal from a consortium comprising Shri Dutt India Pvt Ltd and Shri Dutt Biofuels Pvt Ltd to acquire Indian Sugar Manufacturing Company Ltd.
The consortium has offered to pay Rs 175 crore to acquire the company which has total admitted liabilities of Rs 523 crore. All the lenders of Indian Sugar Manufacturing had earlier approved the proposal.
“The resolution plan annexed to the application is hereby approved,” a division bench of Justice VG Bisht and technical member Prabhat Kumar said in its order on February 6. “It shall be binding on the corporate debtor, its employees, members, creditors, including the central government, any state government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is due,” it said.
Financial creditor Saisidha Sugar Equipments & Engineering Company had last year moved the National Company Law Tribunal, the dedicated bankruptcy court, to initiate a corporate insolvency resolution process (CIRP) against the company after it defaulted on dues of over Rs 71 crore.
Its primary lenders include the Sugar Development Fund represented by IFCI Ltd, State Bank of India, Thane District Central Co-operative Bank and Karnataka State Co-operative Apex Bank. The resolution plan envisages to pay 100% dues to the bankrupt company’s employees and workmen.
Shri Dutt Biofuels is also one of the financial creditors of the company, holding about 17.86% voting share in its committee of creditors.
“The NCLT has approved the resolution plan where the CIRP period was completed within the mandatory timeline prescribed under the IBC (Insolvency and Bankruptcy Code),” said Bijish Balan, managing partner at law firm ASR & Associates. “The resolution plan has 100% voting in favour by lenders and the percentage of the amount provided against the claims in the resolution plan is about 25.68%.”
Tina Jain Mehta, director of boutique branding agency Pineapple Consulting, said after the acquisition, the new owners can focus on building products in the branded communities segment.
“Such a move will help the company weather any cyclical fluctuations in commodity prices and also introducing branded products helps companies gain better market recognition and leverage the evolving customer buying behaviour,” said Jain. “Shree Renuka Sugars owned ‘Madhur’ and Dhampur Sugar Mills Ltd owned ‘Mishti’ are successful examples in the segment.”
Source: Economic Times