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In a twist to the ongoing insolvency proceedings against Nizam Deccan Sugars Ltd, the Telangana government has sought to come up with a resolution plan.
The National Company Law Tribunal (NCLT), which had admitted a petition to initiate insolvency proceedings against the company last year, has now agreed to extend the deadline, giving the State government time to submit a proposal.
Earlier resolution plans put up by bidders for the state-run sugar firm had failed, and it is close to liquidation. With the State government looking to steer it out of the financial mess, Nizam Sugar can hope for a fresh start.
NCLT Judicial Member Bikki Ravindra Babu, in his latest order, excluded 78 days from the 270-day Corporate Insolvency Resolution Proceedings (CIRP) against Nizam Sugar, which came to an end on June 16.
This allows the State government to submit a resolution plan before Insolvency Resolution Professional (IRP) Ramakrishna Gupta. The IRP will now place the plan with the Committee of Creditors (CoC) for its consideration.
The background
Nizam Sugars had filed a petition under IBC, seeking commencement of insolvency proceedings. The CoC, comprising Andhra Bank, Syndicate Bank, UCO Bank and Indian Overseas Bank, was then constituted.
Mumbai-based Phoenix RC Ltd and Bengaluru-based Hindustan Infrastructure Projects & Engineering Pvt Ltd had submitted expressions of interest (EoIs). Citing an amendment to the IBC, the CoC had observed that both the companies’ EoIs were ineligible.
The NCLT, in a bid to facilitate a resolution plan before going for liquidation, extended the CIRP for 90 days beyond the originally allotted 180 days.
Later, at least three firms — Ahmedabad-based Placo Recycle Industries Ltd, Mumbai-based MyCFO and an undisclosed Nagpur-based firm, sought information on Nizam Sugar, but did not submit any resolution plan.
On verge of liquidation
With the 270-day CIRP period ending on June 16, the CoC had passed a resolution for liquidation of the company. But the IRP, on June 14, filed an interim application, seeking an extension by 60 days.
This was when the Telangana government stepped in. Represented by the Principal Secretary, Industries and Commerce, and Director of Sugar and Cane, it sought the permission of the NCLT to implead itself in the proceedings and submit a resolution plan to revive the company.
Considering the interest of stakeholders, the NCLT has permitted the State government to submit its plan.
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