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NCLAT stays revival meet of Gujarat NRE Coke

Gujarat NRE Coke had failed to get any suitor for resolution under the IBC as an ongoing concern as no plan was accepted by its secured creditors

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NCLAT stays revival meet of Gujarat NRE Coke
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A few days before Gujarat NRE Coke Ltd’s revival plan was to go under vote, Jindal Power & Steel Ltd (JSPL), a minority creditor of the company, has secured a stay order by moving National Company Law Appellate Tribunal (NCLAT).

Last week, JSPL moved NCLAT to stay on the NCLT convened revival meeting to be held today and also the NCLT, Kolkata Bench’s May 15 order.

“The Honourable NCLAT has further during the course of hearing granted interim relief to the extent that the operation of the order…of convening of the meetings of Secured / Unsecured Creditors, Foreign Currency Convertible Bond Holders and shareholders of Gujarat NRE Coke proposed to be held on July 16 as ordered by the NCLT, shall be stayed until further orders,” read a communication from JSPL’s legal representatives to Gujarat NRE Coke.

According to the metallurgical coal producing company’s representatives, they had not received any notice from JSPL and thereby were unable to put forward their arguments against JSPL’s petition before the NCLAT. Hence, the next hearing has been scheduled for August 6.

“JSPL is only 0.5% of the total creditors of the company as compared to the State Bank of India, which a is 33% creditor, SBI being a lead banker doesn’t have any problem with the latest scheme, still JSPL moved the petition. Moreover, for JSPL there is no haircut proposed for their approximately Rs 22 crore outstanding. We don’t know the exact content of the petition as we weren’t informed when NCLAT was moved by them. It is only during this week we are likely to know the exact nature of this petition. This was nothing but a last moment play by JSPL,” a Gujarat NRE Coke source said.

As per the proposed scheme, Rs 3,501 crore is to be converted into Rs 500 crore of term loans to be repaid over 10 years at 8.1% interest rate, Rs 40 crore worth of shares of face value Re 1 and Rs 2,961 crore of compulsory redeemable preference shares of Rs 10,000 face value redeemable after 20 years at one go to be issued. Thereby, the promoter shareholding will come down from 25% to 17%.

Of the Rs 3,501 crore, State Bank of India is the lead banker with 33% share in lending, followed by Axis Bank at 18%, JM Financial with 15% and LIC and Bank of Baroda with 8% each.

Along with principal and interest the outstanding is around Rs 4,500 crore.

Under the scheme, over 2 lakh equity shareholders would also benefit as the shares would continue traded actively as against currently suspended.

FRESH HURDLE

  • Gujarat NRE Coke had failed to get any suitor for resolution under the IBC as an ongoing concern as no plan was accepted by its secured creditors
     
  • Its promoter A K Jagatramka had then submitted a scheme under Section 230 of the Companies Act before the NCLT to revive the firm
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