Supreme Court Declines To Lift Stay On Videocon Insolvency
The Supreme Court declined to interfere with the stay on the insolvency resolution process of Videocon Industries Ltd.
The top court was not inclined to express any opinion on the merits of the case, a bench presided by Justice L Nageswara Rao said while hearing a petition filed by the successful bidder, Twin Star Technologies Ltd.—owned by billionaire Anil Agarwal's Volcan Investments Ltd., the parent of Vedanta Group.
The bench, also comprising Justice Aniruddha Bose, asked the National Company Law Appellate Tribunal to expeditiously decide on the issue. The NCLAT is likely to take up the case for hearing on Sept. 7.
Twin Star has offered to pay about Rs 2,900 crore compared to Rs 61,000 crore in dues claimed by creditors, a recovery rate of 5%. In July, the NCLAT ordered a stay on the implementation of the resolution plan on petitions filed by some of the creditors.
The resolution plan was challenged financial creditors including Bank of Maharashtra and IFCI Ltd. Part of the creditors' committee, both had voted against the resolution plan.
Bank of Maharashtra’s Chief Executive AS Rajeev had earlier told BloombergQuint that the plan was being opposed because of the low value ascribed to Videocon by the resolution applicant.
The dissenting creditors are asking that the committee of creditors review the plan and negotiate a higher recovery rate than what is currently being promised by Twin Star Technologies, he said.
In their challenge, the dissenting creditors also pointed to a breach of the confidentiality clause in the resolution process. Twin Star's bid is surprisingly close to the liquidation value of Rs 2,568 crore.