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JSW Steel seeks clarification from NCLT in Vardhman Industries approval

Steel News - Published on Thu, 27 Dec 2018

Image Source: SteelGuru
Business Line reported that JSW Steel has sought clarification from the National Company Law and Tribunal on certain operational direction made while approving its resolution plan to acquire the stressed Vardhman Industries. JSW Steel in a statement “Approving the resolution plan, NCLT in its order had given certain directions that could have the effect of modifying the resolution plan submitted by JSW Steel and approved by the CoC. These directions pertain to utilisation of receivables of Vardhman Industries, notices, assessments or other proceedings pending or threatened against Vardhman Industries and relationship and obligations of the company in relation to various subsidiaries, associates and joint ventures executed by it.”

It said “The directions of NCLT amounts to an amendment of the Resolution Plan submitted by it without seeking its consent. On this basis, JSW Steel proposes to seek a modification and clarification by the Tribunal or any other relevant forums.”

It added “Further steps to be taken by JSW Steel with respect to implementation of resolution plan will depend on the clarifications by NCLT.”

The resolution plan submitted by JSW Steel was approved by the Committee of Creditors of Vardhman Industries, which has been undergoing Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016

As per the terms of approved resolution plan, JSW Steel will infuse INR 63.5 crore in Vardhman Industries through equity shares or debt within 30 days from date of the NCLT order. The financial creditors will receive INR 62.5 crore and the operational creditors will get INR 1 crore for the settlement of the existing Vardhman Industries debt. After paying of dues, the entire existing shareholding of Vardhman Industries will be reduced to zero by way of a capital reduction from the effective date. As per the approved resolution plan, JSW Steel will be classified as the promoter of Vardhman Industries

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Posted By : Sanju Moirangthem on Thu, 27 Dec 2018
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