IBC: NCLT Reserves Order On Sterling Biotech’s Bankruptcy Withdrawal
The National Company Law Tribunal reserved its judgement on a bankers’ plea to withdraw bankruptcy proceedings against Sterling Biotech Ltd. and go for a one-time settlement with the absconding promoters, the Sandesaras.
The tribunal asked Sterling Biotech’s resolution professional to explain why he did not approach the bench after the proposal was rejected with 89 percent vote at the first meeting of the committee of creditors led by Andhra Bank
The resolution professional said the decision was taken as the time period for initiating the bankruptcy proceedings had lapsed and that he merely acted as a facilitator for lenders, who chose to go for another vote.
The banks have approved a one-time settlement offer from promoters Sandesaras of about Rs 3,945 crore out of the Rs 7,500 crore they owe to lenders.
Meanwhile, financial services firm Madison Pacific Trust has challenged the withdrawal of bankruptcy proceedings saying it held over 10 percent voting rights in the committee of creditors and their consent was not sought by the resolution professional at the time of voting.
Madison Pacific Trust said the tribunal cannot allow withdrawal of the bankruptcy application under the maintainability issue.
Sterling Biotech owes Rs 1,800 crore to the bond holders of Madison Pacific Trust.
The Sterling Group owes over Rs 15,600 crore to its financial and operational creditors. While flagship Sterling Biotech owes more than Rs 7,500 crore to lenders, sister concern Sterling SEZ owes over Rs 8,100 crore.