TMI Blog2016 (7) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... FOR THE PETITIONER : MRS SWATI SOPARKAR, ADVOCATE, MR KUNAL J VYAS, WITH MR. SAURABH SOPARKAR, FOR NANAVATI ASSOCIATES, ADVOCATE FOR THE RESPONDENT : MR DEVANG VYAS, ADVOCATE COMMON ORAL JUDGMENT 1. These are the petitions filed for the purpose of obtaining the sanction of this court to a Composite Scheme of Arrangement involving (i) De-merger and Transfer of Demerged Undertaking-1 or Identified Business Undertaking-1 viz. the business undertaking comprising of Tank Business Division of Vadinar Ports Terminal Limited, including its strategic investments in some of the group companies to Essar Ports Limited, (ii) Amalgamation of the residue Undertaking of the Company with Vadinar Oil Terminals Limited (VOTL), the Transferee Company, (iii) De-merger and Transfer of De-merged Undertaking 2 or Identified Business Undertaking 2 comprising the tankage business division of EPL, including strategic investment, directly and indirectly in: (a) VOTL; and (b) VPTL to Essar Power and Minerals Limited (EPML), (iv) De-merger and Transfer of Demerged Undertaking 3 or Identified Business Undertaking 3 viz. the business undertaking comprising of floating cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an ports assets providing services for liquid, dry bulk, break bulk and general cargo. Since the nature of risk and competition involved in each asset is distinct, the proposed restructuring would interalia help in creating an amenable structure for fund raising. The petitions provide the details of the benefits envisaged due to the proposed Composite Scheme. 4. It has been submitted that vide orders dated 26th April 2016 passed in Co. Applications No. 190, 191 and 192 of 2016, filed by Essar Power and Minerals Limited, Hazira Coke Limited and Yash Hotels Private Limited the meetings of the Equity Shareholders and Unsecured Creditors of the three Resulting Companies were dispensed with in view of the written consent letters from all of them, approving the proposed scheme, being placed on record. There are no Secured Creditors of these companies. It has been pointed out that in case of these companies, proposing the consequential reduction of part of the share capital, dispensation was granted from the procedure prescribed under Section 101(2) of the Companies Act, 1956 as well as the procedure prescribed under rule 48 to 65 of the Companies (Court) Rules 1959. 5. It has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensed with in view of the consent letters from all of them, approving the proposed scheme, being placed on record. The meeting of the Unsecured Creditors of the Transferee Company was dispensed with accepting the contention that their rights and interests are not likely to be prejudicially affected as result of the Scheme. However, a meeting of the Secured Creditors of the Company was directed to be convened for seeking their approval to the Proposed Scheme. Pursuant to the directions issued vide the said order, with regard to the conduct of the meeting, after the due service of individual notices to all the Secured creditors of the Company as well as the public notice, the said meeting was duly convened on 25th May 2016 and the proposed Scheme was unanimously approved at the meeting. The result of the said meeting has been placed on record in form of Chairman s report dated 26th May 2016. 8. The substantive petitions for the sanction of the scheme filed by Essar Power and Minerals Limited, Hazira Coke Limited and Yash Hotels Private Limited were admitted on 3rd May 2016. Whereas substantive petitions for the sanction of the scheme filed by Vadinar Oil Terminal Limited, Vadinar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange Ratio Certificate provided by M/S SSPA Co. Chartered Accountants dated 16th April 2016 does not provide detailed workings justifying the exchange ratio proposed under the Scheme indicating that no shares are required to be issued to the shareholders of the said petitioner company. In this regard, it has been clarified/pointed out by Mr. Saurabh Soparkar, learned Senior Counsel appearing with Smt. Swati Soparkar as well as Nanavati Associates, learned advocates appearing for the Petitioner Companies that the entire share capital of Vadinar Ports Terminal Limited is held by two companies, viz. Essar Ports Limited and Vadinar Oil Terminal Limited, which are the petitioners under the said Scheme. Since the Scheme envisages several consequential proposals, the shares of VPTL as held by EPL are going to be transferred to EPML as a part of the Demerged Undertaking-2, and on amalgamation of EPML with VOTL shall be transferred to VOTL as part of the entire undertaking of EPML. As a result VPTL shall become the Wholly Owned Subsidiary of VOTL. The said position is clearly envisaged vide Clause 73 of the Scheme and hence no shares are required to be issued by VOTL. The said clarifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord the Divisional Financial Statements respectively with the petitions as Exhibit-B-2. Perusal of the same makes it clear that there is a clear columnar bifurcation with regard to the De-merged Undertakings which are proposed to be de-merged and transferred to the Resulting Companies. However, since the proposed Composite Scheme envisages several consequential de-mergers, such bifurcations are projected ones. It has been further submitted that the De-merged companies being going concerns, the list of the assets to be actually transferred on the date of the sanction of the scheme shall be submitted with the final order for certification as well as adjudication of the applicable stamp duty. In view of this no further directions are necessary for such details of assets and liabilities of the De-merged Undertakings. (iv) The observation made vide Para 2(f) pertains to obtaining requisite licenses, approvals and other permissions from regulatory authorities for carrying on the activities of handling of oil, petroleum products, mining ports business. In this regard, it has been submitted on behalf of the Petitioners that all the Petitioner Companies had obtained the requisite appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orily and hence do not survive. I have come to the conclusion that the present Composite Scheme of Arrangement is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned. The Scheme is hereby sanctioned. The Restructure of Share Capital including Utilisation of Securities Premium Account as well as Reduction of Issued, Subscribed and Paid up Capital of the Petitioner Companies as envisaged vide Clauses- 25, 26.3, 39.3, 52.3 and 78 of the proposed Scheme are hereby sanctioned. The Minute as presented vide Paragraph 16 (a) is hereby approved. 14. Prayers in terms of paragraph 17 (a) and (b)) of the Co. Petitions No. 173, 174 and 175 of 2016 are hereby granted. Prayers in terms of Paragraph 20 (a) of the Co. Petition No. 232 of 2016 and paragraph 19 (a) of the Com. Petition No. 233 of 2016 are hereby granted. Prayers in terms of paragraph 19 (a), 19 (a-1) and 19 (a-2) are hereby granted. 15. The petitions are disposed of accordingly. So far as the costs to be paid to the Central Govt. Standing Counsel is concerned, I quantify the same at ₹ 10,000/- per petition. The same may be paid to the learned Standing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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