TMI Blog2020 (12) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... to as Scheme ) of the Applicant Company and its Creditors covered under the Scheme (as defined in Part II of the Scheme) for obtaining consent from such Creditors of SEFL more specifically provided in Schedules I, II, III, IV, V and VI of the Scheme. 2. Learned Senior Counsel appearing for the Applicant Company, took us through the averments made in the application as well as the documents annexed hereto. 3. The circumstances which justify and/or have necessitated the said Scheme of Arrangement and the benefits of the same are, inter alia, as follows:- i. The said Scheme is a natural consequence of the First Scheme (defined under Part II of the said Scheme) that SEFL has proposed with its creditors who are banks and financial institutions, which is pending as of now before this Hon'ble Tribunal. The present Scheme together with the First Scheme will help SEFL to protect the interests of both the creditors covered under the First Scheme and the Creditors covered under the said Scheme in order to achieve the required harmony and synergy among those creditors for maintaining SEFL as a going concern. ii. The said Scheme will create an opportunity for SEFL and its cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business. Specifically, the RBI also stated that it aimed to bring out policies that will ease the financial stress caused by the COVID-19 pandemic by relaxing repayment pressures on the borrowers. The RBI, as part of the review of the relief measures, has made a series of announcements by way of various circulars issued on 22 May, 2020 and 23 May, 2020, to inter alia extend the period of moratorium to 31 August, 2020. 5. The issuance of the abovementioned circulars granting moratorium by RBI was to ameliorate the severe effects of the COVID-19 on the borrowers. However, the said circulars on moratorium by themselves could not achieve the desired results. In view of the continued need to support the viable MSME entities on account of the fallout of Covid 19, the RBI issued a circular dated 6 August, 2020 (the First 6 August Circular ) to allow the MSME sector entities to restructure their advances whose aggregate exposure to banks and NBFCs do not exceed ₹ 25 crores. By the said First 6 August Circular, the RBI mandated the banks and NBFCs to restructure existing loans to MSMEs classified as 'standard' without a downgrade in the asset classification. 6. The Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes or redemption dates, etc. 9. The Scheme has been proposed accordingly. 10. SEFL has proposed a Scheme of Arrangement with its Creditors and issued a letter of authorization dated 19th October 2020 for the purpose of appointing Shri Pulak Bagchi, the General Counsel and Key Managerial Personnel (KMPs) of the Applicant Company to take all necessary steps before this Hon'ble Tribunal for implementation of the said Scheme. 11. The Applicant Company confirms that the accounting treatment, if any, arising out of the said Scheme will be in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. 12. The Scheme does not involve any arrangement with its shareholders. There shall be no issuance or allotment of shares/securities to any class of shareholders and their interests in the Applicant Company shall remain unchanged. In view of the aforesaid, no meeting of shareholders is required to be held/convened. 13. The Scheme embodies arrangement between SEFL, and its Creditors covered under Part III of the said Scheme and as specifically provided under Schedules I, II, III, IV, V and VI therein and also annexed to the Application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Scheme) on mutually agreed terms. 18. The Learned Senior Counsel further highlighted that the cash flows of SEFL are being currently controlled by the lender banks and all payments are being preauthorized by them. Even the salaries have been capped and all other dues including statutory dues are being paid as and when such lender banks approve. As the Company is operating on a pan India basis, it is facing operational issues and also the collections from the borrowers have been impacted. The Company, therefore, needs an orderly cash flow management and collections to take care of the interests of the Creditors. 19. Pursuant to the powers conferred under Section 230 of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016 and considering the overall plight of the NBFC Sector and further considering that the Applicant Company is a significant player in the non- banking financial sector and on whom several borrowers are dependent for their business and also considering that any coercive action by any lender on the Applicant Company may further prejudice the current state of affairs, it is prayed that an interim order in terms of sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meeting of the PDI Holders of the Applicant Company be held at The Westin , International Financial Hub, CBD/II Action Area II, New Town, Kolkata 700156 on Saturday, 10th July, 2021 at 11:30 AM for the purpose of their considering, and if thought fit, approving, with or without modification, the said Scheme of Arrangement. 6. Meeting of the debenture trustees representing the Individual Debenture Holders and/or the Individual Debenture Holders themselves (only in the absence of a representative debenture trustee) of the Applicant Company be held at The Westin , International Financial Hub, CBD/II Action Area II, New Town, Kolkata 700156 on Saturday, 24th July, 2021 at 2:30 PM for the purpose of their considering, and if thought fit, approving, with or without modification, the said Scheme of Arrangement. 7. No meeting of the Equity Shareholders of the Applicant Company is required to be held. 8. That at least 30 (thirty) clear days before the said meetings to be held as aforesaid, an advertisement convening the same indicating the day, date, time and the venue of the said meetings and stating that copies of the said Scheme of Arrangement along with the statement required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with a copy of such representation being simultaneously sent to the advocates of the said Applicant. If no such representation is received by the Tribunal within such period, it shall be presumed that such authorities have no representation to make on the said Scheme of Arrangement. Such notice shall be sent in Form No. CAA3 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 with necessary variations, incorporating the directions herein. 11. That the quorum for each of the said meetings of the concerned Creditors of the Applicant Company covered under the Scheme shall be fixed in accordance with Section 103 of the Companies Act, 2013 present either in person or by proxy. 12. It is however provided that in case the quorum of the meeting is not available on the scheduled time and date or in the event of apparent absence of consensus or unanimity between the participating Creditors which may render a meeting futile or upon the request of the majority of the participating Creditors, the concerned Chairperson may adjourn such meeting to any date/time and take a decision on the quorum for the adjourned meeting. 13. Mr. Shaunak Mitra, Advocate, is appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of this order. The Scrutinizer shall be paid a consolidated sum of ₹ 60, 000/- (Rupees Sixty Thousand only) for acting as Scrutinizer. 20. That the respective Chairperson appointed for the said meetings or any person authorised by the Chairperson do issue and send out the notices of the said meeting referred to above. 21. The concerned Creditors of the Applicant Company shall be given the option of voting on the resolution for approval of the Scheme by casting their votes personally or by proxy at the venue of the meeting. 22. Parallelly along with physical meetings, the Company shall have the option to provide a virtual meeting and online polling/e-voting platform to its concerned Creditors via video conferencing or other audio visual mode (VC/OAVM), on the same day, date and time as directed for the respective physical meetings for the purpose of considering and if thought fit, approving, with or without modification, the said Scheme of Arrangement. 23. If such option of virtual meeting is provided by SEFL to its concerned Creditors, the presence of those Creditors of SEFL attending such meeting virtually shall be permitted to be recorded by the Chairpe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eunder shall be followed with such variations as required in the circumstances and in relation to the resolution for approval of the Scheme. 30. The respective Chairpersons appointed for such meetings of the classes of Creditors shall have all other powers under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 read with the other applicable rules and provisions in relation to conduct of the meetings, including for deciding procedural questions that may arise at the meeting or at any adjournment thereof or any other matter, including an amendment to the Scheme, if any proposed by any person(s). 31. The votes cast at the said respective meetings shall be scrutinized by the Scrutinizer. The Scrutinizer shall prepare and submit the respective reports on the meetings along with all papers relating to the voting to the respective Chairperson of the said meetings. The respective Chairpersons shall declare the respective results of the meetings after submission of the respective reports of the Scrutinizer to him. 32. The value of each Creditor under the Scheme shall be in accordance with the respective books of the Applicant and, where entries in the books a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
