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    Videocon Industries RP invites expressions of interest by February 2

    Synopsis

    Venugopal Dhoot promoted Videocon Industries was admitted for resolution by NCLT in June 2018. It has verified secured creditors’ claims of Rs 58519 crore.

    VideoconAgencies
    Lenders of Videocon Industries invited expressions of interest (EoI) for the consumer durable company and its 12 units by 2 February.
    Lenders of Videocon Industries invited expressions of interest (EoI) for the consumer durable company and its 12 units by 2 February, according to a notice published by the resolution professional.

    This follows the ruling by the appellate tribunal on January 5 that winning bidder Twin Star Technologies’ plan was not compliant with the Insolvency and Bankruptcy Code and thus remitted the matter back to the committee of creditors (CoC) to complete the resolution process. The majority of lenders last week voted in favour of restarting the process by inviting EoI, two people aware of the matter said. In a notice, Abhijit Guhathakurta, backed by Deloitte India, has set March 19 as the deadline for receiving firm bids.

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    Venugopal Dhoot promoted Videocon Industries was admitted for resolution by NCLT in June 2018. It has verified secured creditors’ claims of Rs 58519 crore.

    Early this week Twin Star appealed before the Supreme Court against the National Company Law Appellate Tribunal order.

    The NCLAT order was in response to an appeal filed by CoC that the Twin Star’s plan was not feasible. But the appeal was primarily driven by the criticism that Videocon and its units were sold for a song. The recovery for lenders was 4.15% of the admitted claims. NCLT approved the Twin Star’s resolution plan only after 95% of lenders voted in favour.

    Secondly, lenders were uncomfortable when the NCLAT raised questions about the confidentiality of the liquidation value since the offer made by Twin-Star was Rs 2962 crore, marginally above the Rs 2568 crore liquidation value. Interestingly, even the offer made by winning bidder Jalan-Karlock consortium for Jet Airways is half the liquidation value. Winners offered Rs 1133 crore staggered payments as against liquidation value of Rs 2555 crore. The majority of the Jet Airways lenders voted for the plan despite a 93% haircut.

    Vedanta Resources promoted Twin Star is likely to argue that the CoC is Functus Officio - implying that the role of the committee of creditors ends soon after a plan is approved - by adjudicating authority. Thus, any appeal by the CoC is not maintainable.

    The winning bidder will also argue that once a plan is approved by National Company Law Tribunal, it is binding on all the stakeholders in line with a landmark Supreme Court judgement in September on Ebix Singapore, which stated that NCLT approved plan cannot be withdrawn or modified.


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