DSP Investment Managers has filed an intervention application with National Company Law and Tribunal (NCLT) to secure its investment of ₹100 crore in the non-convertible debentures issued by Sintex BAPL.

The move follows after Axis Bank declaratory suit claiming first charge over the proceeds from sale of assets by Sintex BAPL. DSP Investment Managers is the asset management company of DSP Mutual Fund.

DSP Credit Risk Fund had invested about ₹100 crore in the non-convertible debentures of Sintex BAPL in 2017. Subsequently, the company defaulted on its payment obligation and the fund house had written down the investment to ₹20 crore as of April-end.

Files case

DSP Investment along with other debenture holders had filed a petition before the Civil Court in Ahmedabad and was instrumental in getting the permission of Debenture Trustee Vistra ITCL (India) to sell the overseas business.

However, Axis Bank recently filed a fresh declaratory suit claiming first charge over the sale proceeds on the basis of an undertaking executed by Sintex in its favour.

In response, DSP Investment Managers has filed an intervention application opposing the grant of any relief to Axis Bank.

Further, the debenture holders claimed that Sintex must prepay the Debenture Holders out of the sale proceeds and the same were to be deposited in the Specified Bank Account (as defined under the Debenture Trust Deed) over which the Debenture Holders have first ranking exclusive charge.

Necessary documents were executed in favour of Debenture Trustee including making it exclusive signatory over the offshore account where sale proceeds are presently lying, sources said.

Earlier, an operational creditor had dragged Sintex Plastics Technology, the parent of Sintex BAPL, to NCLT over payment default. The company recently sold its step-down overseas subsidiary Sintex NP SAS for about ₹1,000 crore.

Sintex Plastics Technology filed an application in NCLT to withdraw insolvency proceedings. Following this, the asset management company filed an intervention petition opposing the move.

comment COMMENT NOW