- (1.) The present application bearing CA No. 123 of 2017 in CP No. 1/IBC/HDB/2017 has been filed by Ms. Mamta Binani, Resolution Professional against Edelweiss Asset Reconstruction Company Limited (EARCL for short) and four others, in the Corporate Insolvency Resolution Process ('CIRP') by the Corporate Debtor i.e. Synergies Dooray Automotive Ltd. ('SDAL') under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 ('IBC') read with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ('Regulations') seeking approval of the Resolution Plan, as submitted by Synergies Castings Ltd., as duly approved by the Committee of Creditors in the 2nd meeting of the Committee of Creditors held on 24.06.2017.
(2.) Brief facts of case, as submitted by the Resolution Professional, which are relevant to the issue in question, are as follows: i. The Tribunal vide its order dated 23.01.2017 admitted the Petition filed by the Corporate Debtor seeking initiation of the Corporate Insolvency Resolution Process, under Section 10 of the IBC, to appoint Applicant herein as the Interim Resolution Professional (TRP'). As per Section 12 of the IBC, the CIRP period ends on 21.07.2017 (180 days). ii. That pursuant to the above, the Applicant herein issued a public announcement and invited claims from the creditors of the Corporate Debtor as envisaged in the IBC. On receiving such claims, the Applicant herein collated the same, and constituted a Committee of Creditors. The first meeting of Committee of Creditors was called on 22.02.2017, on which date, the Applicant herein was confirmed as the Resolution Professional (RP) of the Corporate Debtor. iii. In pursuance to the same, the Applicant has ensured statutory compliance of all provisions of the IBC and the Rules and Regulations made thereunder. After collation of claims, the Applicant has duly filed the List of Committee of Creditors, which has been updated from time to time after verification; it was placed on record of this Tribunal on 30.05.2017. The latest position of Creditors as per the list, reflecting the percentage exposure and the voting share is mentioned hereunder: iv. That as per the requirements of Section 25(2)(h) of the IBC, the Applicant herein initiated the process of inviting prospective Resolution Applicants for submission of Resolution Plans for the resolution of the Corporate Debtor. The above process was carried out through a Merchant Banker, who invited applications from prospective Resolution Applicants and also made publication in this regard. v. That in response to the aforestated expression of interest, 4 participants applied for the offer document, out of which, only the following entities sent Resolution Plans: a. SMB Ashes Industries b. Synergies Castings Limited c. Suiyas Industries Private Limited. vi. The applicant herein has already filed an affidavit dated 17.06.2017, wherein the detailed steps and statutory compliance undertaken by the Applicant have been placed before this Tribunal. The Tribunal during the hearing held on 19.06.2017, took note of the Affidavit dated 17.06.2017 filed by the Resolution Professional and specifically directed all the parties to participate in the meeting of the Committee of Creditors dated 24.06.2017 and extend full cooperation to the Resolution Professional. And further directed the Resolution Professional to expedite the matter and prepare a Comprehensive Plan by the next date of hearing while listing the matter for hearing on 11.07.2017. vii. Accordingly, the 2nd meeting of the Committee of Creditors was convened on 24.06.2017, wherein, in the Agenda, the only List of Issues to be voted upon was the presentation, consideration and approval of the Resolution Plans submitted by the Resolution Applicants, with or without modifications. The Resolution Plans submitted by SMB Ashes Industries and Suiyas Industries Pvt. Ltd., placed before the meeting held on 24.06.2017 was unanimously rejected by the Members of the Committee of Creditors. However, Resolution Plan submitted by Synergies Castings Ltd. (SCL) was approved by a majority vote of 90.16% (EARC abstained from voting), with certain modifications (duly reflected in the minutes) and the above item was declared as approved/passed by the requisite majority by the Applicant herein. The minutes of the 2nd meeting of Committee of Creditors dated 24.06.2017 has been circulated amongst all stakeholders vide email dated 26.06.2017. So the instant Application is being moved for submission of Resolution Plan under section 30(6) of the IBC and for approval under Section 31(1) of the IBC.
(3.) The major objective behind the Resolution Plan is as under:- I. The Resolution Plan envisaged by SCL for insolvency resolution of SDAL and to ensure continuity of business along with most effective use of the assets and equipments of SDAL is as detailed below: a) Financial Re-Structuring - Restructuring of Debts by way of settlement in terms of directions of the BIFR and payment of restructured dues over a period of three years. b) Operational Restructuring - Amalgamation of Corporate Debtor with the Applicant. c) Capital Restructuring - Allotment of shares of the merged entity to the shareholders of Corporate Debtor and payment of cash towards fractional shares. d) Payment to Operational Creditors and Statutory Dues - Dues to the Operational Creditors be restructured and payment to such Operational Creditors and the Statutory Dues to be made in a staggered manner after completion of payment to the Financial Creditors. e) Infusion of fresh funds by the promoters - Fund infusion by promoters of the Applicant Company, if required. f) Payment of Insolvency Resolution Process Cost in priority to all other debts. g) IRP Cost Amalgamation with appointed date as 31.03.2017 with the following major benefits:- i) Operational Synergies ii) Marketing synergies iii) Financial synergies iv) Continuation of employment. h) Statutory dues As per the latest provisional financial statement of SDAL for the FY ended on 31st March, 2017 made available to us, the amount outstanding towards Statutory Dues was Rs. 389.53 lakhs (constituting of Rs. 351.69 Lakhs as deferred sales tax dues and Rs. 37.84 lakhs as service tax dues). It is proposed to make full payment of Rs. 389.53 Lakhs (as reduced by any payments that would have been already made by SDAL till the date of approval) pertaining to Statutory dues, however the payment shall be made in a staggered manner over a period of three years on an interest free basis, and the payment shall commence after completion of due payment of restructured dues to all the secured financial creditors of SDAL. II. Cost of Scheme and Means of Finance As per the proposed settlement and payments envisaged to various creditors of SDAL and also the payment of the Insolvency Process Cost, the total cost of scheme is arrived at Rs. 5,408.21 lakhs. The same is proposed to be funded by way of induction of long term funds and through the operational accruals of SCL. The gist of scheme and means of finance are tabulated below: III. Payment plan to Financial Creditors and the Operational Creditors- The plan for making payment of the amount mentioned in Clause 5.1 to financial creditors and other class of creditors has been tabulated below: The Plan also provided Profit & Loss projections upto 31.03.2023.;