NCLAT Stays Videocon Sale For Twin Star Technology’s Bid
- ByAyushi Ray | July 20, 2021
NCLAT stays Videocon sale for Twin Star Technology’s bid. Twin Star Technology which is owned by billionaire Anil Aggarwal, had planned to buy Videocon Industries Ltd , but has received a setback after the National Company Law Appellate Tribunal (NCLAT) put on hold the potential transaction following appeals by dissenting creditors unhappy with the contours of the deal. A two-judge bench headed by officiating NCLAT chairman Ashok Iqbal Singh Cheema stayed the implementation of the resolution plan approved by the National Company Law Tribunal and adjourned the matter till September 7; till then, Videocon will be managed by the resolution professional. Bank of Maharashtra and IFCI had filed a plea opposing the existing plan, arguing that the value realized through the sale to Twin Star Technologies is less than the liquidation value, and also that a bulk of the payment will be made through non-convertible debentures.
Twin Star Technologies has offered to pay ₹2,962 crore for all 13 group firms of Videocon against admitted claims of ₹64,838 crore. This comprises only 4.15% of the total outstanding claim and implies a 95.85% haircut for creditors. The counsel for the dissenting creditors argued that Twin Star Technologies will not make any upfront cash payment and will instead pay the first instalment following the issuance of NCDs after 25 months. “It is argued that it is a matter of concern that the corporate debtors in the consolidated proceedings had cash of ₹200 crore and the SRA (successful resolution applicant) would bring in just ₹262 crore and from that also, first payment of ₹200 crore will be brought in 25 months. Beyond ₹262 crore, the rest was being brought in only by way of NCDs to be paid in six years,” said NCLAT in its order.
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