The National Company Law Tribunal (NCLT) has approved a Rs 100-crore resolution plan to revive Panyam Cements and Mineral Industries.
The plan, submitted by a consortium of cement consultancy firm RV Consulting Services (RVCS) and Sagar Power Ltd (SPL), was approved by the Amaravati bench of the NCLT.
The Tribunal’s acting president Bhaskara Pantula Mohan said Panyam needs the support of the Andhra Pradesh government in the form of renewal of its mining leases and recommended that the state consider grants and concessions for its revival.
Panyam has a cement manufacturing facility in Kurnool district.
The resolution plan by RVCS-SPL involves Rs 100.5 crore, including Rs 90.25 crore of payments to its financial creditors within 30 days from the date of the Tribunal approving the plan. Of this, Rs 88.75 crore will be paid to the secured creditors and the balance Rs 1.5 crore will be paid to unsecured creditors.
In addition, the RVCS-SPL consortium has agreed to infuse Rs 150 crore after the resolution plan is implemented.
The fresh capital will be deployed for capital expenditure and working capital of Panyam Cements.
In addition to the cash consideration, the Tribunal has found two non-core assets of Panyam Cements. These include Rs 105 crore of inter-corporate deposits and 12.5 million shares of Rs 10 each of SPY Agro Industries owned by the corporate debtor.
The Tribunal has asked financial creditors to appoint an identified assignee, who will be entitled to dispose of the non-core assets and distribute the proceeds among the secured financial creditors.
In May 2020, the Tribunal had ordered a corporate insolvency resolution process at Panyam Cements following a petition filed by IDBI Trusteeship Services which claimed default by the corporate debtor pertaining to redeemable non-convertible debentures worth Rs 187 crore.
