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Facing liquidation, beleaguered metallurgical coal maker Gujarat NRE Coke Ltd’s employees have started a campaign to push for a revival of the company to protect their jobs.
Over 100 employees of Gujarat NRE Coke have accused the liquidator of sabotaging the revival attempts being made by the company, which is a going concern with operational plants having 850 employees and two lakh public shareholders. A signature drive under ‘Save Gujarat NRE’ has been floated highlighting the benefits of a revival scheme against the impacts of liquidation.
The revival plan — as proposed by 109 shareholders - doesn’t require additional funding or moratorium or haircut for the lenders. While majority of the unsecured creditors and over 500 public shareholders supported the plan, the bankers led by State Bank of India have reportedly opposed it. The employees allege that the banks were misled by the liquidator with false information about company’s financial viability.
Pointing out at the lack of interest from the liquidator for the revival of the company, Sunil Maskara, designated Managing Director, Gujarat NRE Coke, stated that while the liquidation risks about 850 jobs, it is also against the commercial interests of the banks.
The debt-ridden company owes about ₹4,600 crore to secured and unsecured creditors. The liquidation value of the company has been assessed at ₹360 crore, eroding most of the monies of its creditors.
Maskara further said, “The aim of The Insolvency and Bankruptcy Code is to revive stressed companies and not to liquidate them. Even the National Company Law Appellate Tribunal (NCLAT) has clearly directed the liquidator to work towards revival of the company. However, the liquidator has been acting on the contrary.”
“He (the liquidator) has been disturbing the company’s operations by his arbitrary and unprofessional actions. Most importantly, he has been misleading lenders about the company’s state of operations in a bid to push it towards liquidation,” added Maskara.
He also alleged that the liquidator has failed to highlight company’s turnover and cashflows that it continues to generate even during liquidation. The company has recorded turnover of ₹1,300 crore while facing bankruptcy proceedings, Maskara informed adding that a recently completed Techno Economic Viability (TEV) study has also confirmed revival potential of the company.
In 2017, the company had approached the Kolkata bench of National Company Law Tribunal (NCLT) to initiate insolvency proceedings following defaults on repayments to its creditors.
After the company didn’t get any bids and couldn’t submit a resolution plan within the stipulated 270-day period as provided under the Insolvency and Bankruptcy Code (IBC), the NCLT cleared the liquidation of the company in January 2018 appointing a professional, Sumit Binani as the liquidator.
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