Promoters tell NCLT: ‘Will clear all dues within 180 days’
The promoters of Siva Industries Holdings Ltd. have told the National Company Law Tribunal (NCLT) that they would clear all dues, within 180 days, as per the terms of agreed out-of-court settlement with the lenders. The NCLT had sought explanation from lenders on the rationale behind accepting the one-time settlement offer.
In 2019, NCLT had admitted insolvency proceedings against the C. Sivasankaran-promoted company in a case filed by IDBI Bank Limited.
Later, the majority of the committee of lenders had approved a one-time settlement offer from the promoters, which had been filed before the NCLT as per 12A of the Insolvency and Bankruptcy Code (IBC).
As per legal filings, there was a total claim of about ₹4,863 crore. Of this, claims of ₹644 crore by IDBI are in dispute and are to be settled based on court proceedings.
The remaining claims of about ₹4,200 crore are proposed to be settled through payment of ₹323 crore by Siva Industries and ₹555 crore from third-party guarantors.
Blackstone’s International ARC and Abu Dhabi’s Masdar hold 40% of the claims.
Indian public sector banks would get 26% of their claims as per the one-time settlement proposal.
The lenders had told the NCLT that the promoters’ settlement offer gave them a much better recovery compared with other options like liquidation or an alternative resolution plan to take over the company.
Counsel for the promoters argued that this case hads been unnecessarily prejudiced due to incorrect comparisons with Videocon and DHFL, which were sold to Vedanta and Piramal respectively, under the corporate insolvency resolution process through approval of their resolution plans.
Unlike resolution plans, the settlement proposal will not allow the company to reset its obligations with operational creditors, the counsel added.
The tribunal will hear the matter again on June 24.
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