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NCLT orders insolvency proceedings towards Vadraj Cement

Mumbai: The Mumbai bench of the insolvency tribunal has ordered the initiation of a company insolvency proceedings towards Vadraj Cement, a gaggle firm of the bancrupt ABG Shipyard, after the cement producer defaulted on dues of over 87 crore to Punjab National Bank.

“Contemplating the details and legislation, this bench is of the view that in such circumstances, it’s crucial that company insolvency decision course of (CIRP) is barely to be initiated in respect of the company debtor (Vadraj Cement). The default of the company debtor has been established and the applying filed beneath Part 7 of the Insolvency and Chapter Code (IBC) deserves to be admitted,” a Nationwide Firm Regulation Tribunal (NCLT) bench led by Justices KR Saji Kumar and Sanjiv Dutt stated in an order on 3 February.

The bench appointed Pulkit Gupta, a companion at EY (debt and particular conditions) because the interim decision skilled who will handle the day-to day affairs of the corporate. In November, the Financial Instances reported that Adani Group, JSW Cement and ArcelorMittal had been in working to purchase the bankrupt Gujarat-based agency.

State-owned Punjab Nationwide Financial institution, one in all its collectors, had filed an software beneath the IBC to provoke insolvency proceedings towards the cement for defaulting on its dues.

The financial institution informed the tribunal that regardless of repeated requests, the corporate did not repay its dues. Following the default, the financial institution filed an insolvency software in September 2018, nearly a 12 months after it was labeled as a non-performing asset (NPA) in December 2017.

In August 2018, the Bombay Excessive Court docket ordered Vadraj Cement to be wound up after commerce creditor Beumer Applied sciences India dragged it to court docket to recuperate dues. The court docket, nevertheless, recalled the winding-up order and as an alternative transferred the matter to the NCLT bench.

The corporate’s complete debt stands at 7,000 crore, in accordance with the ET report cited earlier, and lenders embody Punjab Nationwide Financial institution, Union Bank of India, Central Bank of India, Indian Overseas Bank, Financial institution of India, and Bank of Baroda.

ABG Shipyard was one of many 12 accounts that RBI had, in 2017, requested banks to provoke insolvency proceedings towards. Essar Metal, Jaypee Infratech, Bhushan Energy & Metal, Amtek Auto, and Alok Industries had been the opposite large names on the record.

Whereas Punjab Nationwide Financial institution was represented by Prakash Shinde and Ruchita Jain of legislation agency MDP Companions, Vadraj was represented by advocate Suyash Shanker.

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Revealed: 04 Feb 2024, 03:45 PM IST

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