There was plenty of action at the bankruptcy courts this week, with breakthroughs achieved in a couple of cases that had been hanging fire for quite some time. Deccan Chronicle, Sterling Biotech and RattanIndia were among those in focus. Here’s a summary of the top developments:
Nirav Modi firms dragged to NCLT
State-owned Corporation Bank, part of the consortium of lenders to fugitive diamantaire Nirav Modi’s firms Firestar Diamond International and Firestar International, approached the insolvency court in connection with two loan defaults, The Economic Times reported.
These were the first insolvency petitions against Modi filed by any lender in India since government agencies launched a probe against the jeweller and his uncle Mehul Choksi, promoter of Gitanjali Gems, for their alleged involvement in a $2-billion fraud unearthed at Punjab National Bank in February last year.
Firestar Diamond had filed for bankruptcy in New York last year. The US-based company listed around $100 million in assets and liabilities and noted it had 50-99 creditors. While Indian authorities are opposing the proceedings in the US, the court is likely to hear the matter on July 17.
Sterling Biotech gets reprieve
Sterling Biotech received a reprieve after the National Company Law Appellate Tribunal (NCLAT) stayed liquidation proceedings against the pharmaceutical company.
The stay on an earlier National Company Law Tribunal (NCLT) order was granted based on two separate petitions filed by Sterling Biotech employees and its lead lender Andhra Bank.
Along with other creditors, Andhra Bank agreed for a one-time settlement offer from the promoters of Sterling Biotech, the Sandesara family, who will pay about half the dues.
Sterling promoters Chetan and Nitin Sandesara are currently absconding and believed to be in Africa. Indian agencies are probing allegations of the brothers’ involvement in a fraud worth than Rs 5,000 crore.
Deccan Chronicle saga set to end
The Hyderabad bench of the NCLT approved a plan by an investment arm of Kolkata-based Srei Group to acquire debt-laden media house Deccan Chronicle Holdings Ltd.
In a case that had dragged on for two years, the court cleared Srei Multiple Asset Investment Trust Vision India Fund’s offer for Deccan Chronicle.
The offer involves a payment of Rs 408.06 crore in cash and certain high-value assets as well as a share in the Indian Premier League team Deccan Chargers. The amount will be distributed among 37 financial creditors, the tribunal said in its order.
Goldman, SSG circle RattanIndia
The Goldman Sachs Group and Asian distressed credit specialist SSG Capital Management were in separate talks to buy up to Rs 3,500 crore worth of bad loans from distressed RattanIndia Power, The Economic Times reported.
The report said that there were other contenders for the portfolio apart from Goldman and SSG but didn't specify a name.
The power company has defaulted on loans worth about Rs 20,000 crore from lenders including Power Finance Corp, State Bank of India, Bank of India, Axis Bank, Bank of Baroda and IDBI Bank.
Maruti Ferrous to buy Sunil Ispat
The NCLAT approved the bid by Maruti Ferrous Pvt. Ltd to acquire bankrupt steelmaker Sunil Ispat and Power.
Four months ago, the NCLT had given its approval for Maruti Ferrous’ plan.
The steel products maker had then submitted a modified resolution plan to include the operational creditors.
Lenders to the Kolkata-based debt-laden firm will recover half of the principal amount they had lent.
The total dues claimed in the court were about Rs 36 crore, which Sunil Ispat and Power owed to Hudco, Asset Reconstruction Company (India), Syndicate Bank, Bank of Baroda and Central Bank of India, among others.