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TMI Blog2020 (1) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 31 (l) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 (4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2 16 for approval of the Resolution Plan submitted by the successful Resolution Applicant i.e. Sterlite Power Transmission Limited. 2. Facts of the case: - (i) By Order dated 06.07.2017 passed by the NCLT, Kolkata Bench, the Corporate Insolvency Resolution Process of the Corporate Debtor M/S Ferro Alloys Corporation Limited commenced. Mr. K.G. Somani was appointed as Interim Resolution Professional. In the Committee of Creditors Meeting held on 08.08.2017, IRP Mr. K.G. Somani was appointed as Resolution Professional. (ii) The Promoters of the Corporate Debtor filed a Company Appeal (AT) N0. 92 of 2019 before the Hon'ble NCLAT challenging the Order of admission dated 06th July, 2017. By Order dated 08th January, 2019, the Hon'ble NCLAT dismissed the appeal. The Hon'ble Apex Court also dismissed the appeal vide Order dated 11th February, 2019. (iii) In CA No 309/2018 it was submitted that the Corporate Insolvency Resolution Process of 270 days was due to expire on 02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that Request For Resolution Plan (RFRP) dated 19th August, 2019 was called from the prospective Resolution Applicants. As per the invitation, the last date for submission of the plan was 30th September, 2019. However, this date was extended and finally extended up to 30th Oc!ober, 2019. The Resolution Professional received 7 (Seven) prospective applications which was noted in the 20th Committee of Creditors Meeting held on 16th October, 2019. The Resolution Applicants are: - a) Jindal Stainless (Hisar) Limited; b) Sterlite Power Transmission Limited; c) Indian Metals and F rro Alloys Limited; d) Prudent ARC Limit d; e) MOIL Limited; f) Asset Reconstructio Company (India) Limited; g) Essel Mining and In ustries Limited. 4. Out of seven R solution Applicant, who have expressed interest only one Resolution Applicant, namely, Sterlite Power Transmission Limited (SPTL) submitted a Resolution Plan on 30th October, 2019. This was opened in the 29t Meeting of the Committee of Creditors held on 30th October, 2019. Thereafter on 07th November, 2019, another Resolution Applicant, namely, (IMR) Metallurgical Resources AG also contacted the Resolution Professional and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and distribution of voting share among the is as under: - Sl. No. Name of Creditor Voting Share Voting for Resolution Plan (Voted for/Dissented/Abstained 1 Rural Electrification Corporation Limited RECL 91.60 % Voted For 2 Syndicate Bank 0.45 % Abstained 3 Central Bank of India 3.55 % Voted for 4 Bank of India 2.26 % Dissented 5 State Bank of India 0.74 % Dissented 6 Toplight Corporate Management Private Limited 1.39 % Abstained 7 Aroma Plantation Private Limited 0.01 % Abstained Total 100.00 % 8. Resolution Plans as per the evaluation matrix and declaration of the highest scoring Resolution Applicant is as under: - Sterlite Power Transmission Limited: Evaluation Criteria Score 1. Upfront Cash 37.76 2. NPV factoring including upfront cash 25.00 3. Equity infusion for improvement in ops 10.00 4. NPV o operational creditors Subtotal (out of 80) 72.76 5. Reasonableness of financial projections 8.50 6. Ability to turnaround 5.00 7. Standing of the RA 5.00 Subtotal (out of 20) 18.50 Grand Total (out of 100) 91.26 IMR Metallurgical Resources AG: - Evaluation Criteria Score 1. Upfront Cash 40.00 2. NP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other debts of the Co orate Debtor. Section 3 (a) of the Resolution Plan. Section 30 (2) (b) of the Code. The Resolution Plan provides for the payment of the debts of Operational Creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the Operational Creditors in the event of a liquidation of the Corporate Debtor under Section 53 or less than the amount payable to Operational Creditors if the resolution proceeds were to be distributed in accordance with the priority under Section 53, whichever is higher. Section 3 (b) and 3 (e) of the Resolution Plan. Section 30 (2) (b) The Resolution Plan provides for the payment of liquidation value to the dissenting Financial Creditors. Section 3 (e) of the Resolution Plan. Section 30 (2) (c) of the Code. The Resolution Plan provides for the management of the affairs of the Corporate Debtor after approval of the Resolution Plan. Section 8 and 9 of the Resolution Plan. Section 30 (2) (d) of the Code. The Resolution Plan provides for the implementation and supervision of the Resolution Plan. Section 9 and 10 of the Resolution Plan. Section 30 (2) (e) of the Code. The Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total verified amount of Rs. 808.82 Crores, the Resolution Plan provides for the following: - (a) An upfront payment amount of Rs. 10 Crores plus cash equivalent to cash balance in Facor Power Limited ('FPL') towards settlement of claims of the consenting Financial Creditors ('Upfront Payment'); (b) An amount of Rs. 270 Crores ('Total Consideration') will be converted into zero coupon secured and unlisted nonconvertible debentures and will be issued to the consenting Financial Creditors in proportion manner. Further, the Resolution Pian clarifies that the Total Consideration shall be first applied towards payment of] interest component and then against the principal amount of the financial debt; (c) Dissenting Financial Creditors - As per the Resolution Plan, an amount equal to the amount to be paid to dissenting Financial Creditors in accordance with Section 53 of the Code in the event of liquidation of the Corporate Debtor will be converted into zero coupon secured and unlisted nonconvertible debentures and will be issued to the dissenting Financial Creditors in proportional manner; (d) Operational Creditors - Against the total verified claim of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to Annexure - 4 of Resolution Plan, the request for certain relief and concessions, it is hereby clarified that such exemptions, reliefs, concessions shall be construed as NOT GRANTED. 18. Applications/lntervening Applications against approval of Resolution Plan: - (i) CA (IB) No. 160/CTB/2019 is filed by unsucc ssful Resolution Applicant. This CA (IB) No. 160/CTB/2019 is DISMISSED. Orders passed vide separate sheets. (ii) IA (IB) No. 175/CTB/2019 is filed by Promoters/Directors of the Corporate Debtor. It is stated that the promoter has submitted Settlement Proposal far superior than that of approved Resolution Plan. However, the same was REJECTED. a. Further, they stated that, mandatory departure from 36 (b) Regulation. The EOI and RFRP were modified. The inclusion of profile of Facor Power Ltd., and insisting of expertise in power, as necessary qualification of Resolution Applicant is not appropriate. It is stated that no notice was issued to promoters as per Section 24 (3). The revised Resolution Plan, was passed between 11:00 P.M. to I I :30 P.M. Hence, the promoters did not have time to effectively participate. Further, there is undervaluation of the mines. 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