A two-judge bench headed by officiating NCLAT chairman Ashok Iqbal Singh Cheema has stayed the implementation of the resolution plan and adjourned the matter to September 7, and until then the company will be continued to be managed by the resolution professional.
Bank of Maharashtra and IFCI had filed a plea opposing the existing plan arguing that the value ascribed to the company was very close to the liquidation value and even a part of the payment to dissenting creditors was through non-convertible debentures (NCDs). That is in contrast with the Supreme Court order in the Jaypee Infratech case, which had set a precedent that dissenting creditors only be paid in cash.
“This stay now means that the deal could be stuck for months as it will be caught up in the legal whirlwind of replies and counter replies. This NCLAT order is a result of the unease on the large haircut that the creditors had agreed to though it is fact that the best offer was chosen from what was available,” said a person involved in the process.
In December, over 94% of the creditors by value voted for Vedanta arm Twin Star Technologies as the preferred bidder. Vedanta’s offer of a little over ?3,000 crore was at a haircut of more than 95% on admitted claims. The National Company Law Tribunal (NCLT) had approved the plan in June but had commented that Vedanta had paid “almost nothing” to take over the company.
Vedanta’s offer includes NCDs of ?2,700 crore and cash of ?551 crore. It also includes some equity to financial creditors in the company.
Videocon has 54 financial creditors with about 33 of them in the committee of creditors. State Bank of India with 19.15% vote is the largest financial creditor, followed by IDBI (16.63%) and (8.69%). All these large financial creditors have voted for Twin Star.
