Lenders of consumer durable company Videocon Industries and its 12 units on Wednesday decided to vote on starting afresh the resolution process of the Venugopal Dhoot-promoted group as directed by the appellate bankruptcy tribunal, said people aware of the development.
“Although the court has directed to restart the process, lenders can go ahead with it only after a resolution on this is passed by the requisite majority,” said one of the lenders. At least 66% of lenders will have to vote to restart the process.
It is yet not clear if the same resolution professional (RP) will continue. “The existing RP, Abhijit Guhathakurta, backed by Deloitte, informed lenders that he would not like to continue with the assignment for personal reasons,” said a lender. “Some bankers felt that since they have just about 100 days to find a buyer, it is better to retain the same RP. Clarity will emerge by the next committee of creditors (CoC) meeting,” the same lender said.
On January 5, the National Company Law Appellate Tribunal (NCLAT) ordered that winning bidder Twin Star Technologies’ plan was not compliant with the Insolvency and Bankruptcy Code and remitted the matter back to the CoC to complete the resolution process.
In December 2020, 95% of lenders had voted in favour of the plan from Twin Star, the holding company of Vedanta Ltd. But, after that, the CoC appealed to the NCLAT that the Twin Star plan was not feasible, following criticism that Videocon and its units were sold at a throwaway price. The recovery for lenders was 4.15% of the admitted claims.
On Wednesday, lenders also discussed the probabilities of attracting a better offer than Twin Star. “It is challenging since the liquidation value and the offer by the winning bidder is already known,” a lender said. A National Company Law Tribunal (NCLT) judge had already raised questions about the confidentiality of the liquidation value since Twin Star’s Rs 2,962 crore offer was marginally above the liquidation value of Rs 2568 crore.
Twin Star is preparing to file an appeal against the appellate tribunal order, as reported. It will argue that once a plan is approved by the NCLT, it is binding on all the stakeholders in line with the landmark Supreme Court order on Ebix Singapore, which stated that an NCLT-approved plan cannot be withdrawn or modified.
