Liquidation process begins at Nicco Corporation

Our Bureau Kolkata | Updated on January 08, 2018 Published on October 24, 2017

A public announcement inviting claims against Nicco Corporation Ltd, whose liquidation has been ordered by the National Company Law Tribunal (NCLT), has been released.

According to Vinod Kothari, the liquidator appointed for Nicco, this will help determine the amount payable by the company.

Defaults on loans

Nicco, a specialised cable-maker, defaulted on bank loans amounting to ₹300 crore.

The lenders include State Bank of India, Allahabad Bank, Canara Bank and Central Bank of India.

The Kolkata-based company moved to insolvency court after the introduction of the new Bankruptcy Act. The deadline for Nicco’s debt resolution expired on October 13.

Liquidation of assets

As per the process of liquidation, the liquidator will first invite claims from creditors to assess its total value.

The next step is to protect and assess the value of the assets of the company forming part of the so-called liquidation estate, and take a view whether there are any transactions that constitute avoidable deals (such as preferential transfers or undervalued deals), where the company may have suffered, Kothari told BusinessLine.

“Once the assessment is done, the liquidator will proceed to liquidate the assets and pay claims and finally apply for dissolution of the company,” he said.

Claims of workers

Workers and secured creditors are given proportional claims over the assets of the company.

The company had close to 400 workers engaged at its two facilities in Shyamnagar in West Bengal and Baripada in Odisha.

“The liquidation order operates as a statutory discharge of all employees. Hence, all employees stand terminated,” he said.

Published on October 24, 2017
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