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TMI Blog2021 (8) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ement between Government of Kerala and HPCL on 07.10.1974 for establishment of Kerala Newsprint Project by which Government of Kerala has granted various concession, rights and privileges to HPCL with an objective to promote and encourage industries in the State. Government of Kerala acquired on behalf of HPCL land consisting of 282.86 Hectares and assigned in favour of HPCL pursuant to an agreement dated 29.01.1979. Government of Kerala also granted a lease of 3035.15 Acres of Land to HNL for captive plantation for the requirement of raw material for the Project. HNL produces standard newsprint grades of 42 GSM,45 GSM and 48.8 GSM of quality, which is at par with the best available in the market. HNL meets major portion of its requirement of fibrous raw material from the State Government Forests. The installed capacity of the HNL plant is 1,00,000/- Metric ton per annum in the year 1993. When the Plant was operational on February 2018 the manpower of HNL was 442 permanent employees, 508 Contractual, 27 attendant trainees (to be absorbed as permanent) 32 tenure employees and 11 contractual appointment respectively. HNL is a township having all infrastructure facilities including 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC in the seventh meeting held on 18.09.2020 discussed the Resolution Plans and after due deliberations requested both the RAs to revise and resubmit the Resolution Plan. Accordingly, the Resolution Applicants revised their resolution plans. At the 9th meeting of the CoC held on 16.12.2020, detailed deliberations and discussions were carried out on the resolution plans. The Committee rejected the plan of Sun Paper Mill Ltd as the same is not legally compliant as it does not meet the mandatory requirement under the Regulations. The Committee further deliberated on the plan of KINFRA and decided to further negotiate with KINFRA with respect to improvement of financial offer and also to reduce the period of payment under the Resolution Plan such as that the entire payable under the plan to the creditors shall be disbursed before 10.03.2021. The KINFRA agreed to the proposal made by CoC with respect to reducing the time line of payment under the plan and agreed to make the entire payment within 45 days from the approval of the plan, ie. before 20.03.2021 and resubmitted the revised plan on 22.12.2020. 6. The CoC in its 10th meeting held on 24.12.2020, after due deliberation, approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity, etc., thus providing a ready-made manufacturing environment for easy start-up of industrial units with minimum time and cost. The resolution plan has the following salient features: (i) Upfront Payment of CIRP Costs in priority to any other payment. (ii) 35.13% payment to dues of workmen, trainees, secured financial creditors and Statutory PF claims. In case of Secured Financial Creditors, this shall constitute 45% of total principal amount outstanding; (iii) 16.31% Payment to Statutory authorities other than PF authorities, employees, unsecured creditor; (iv) Entire payment to Operational Creditors agreed in the Plan- within 45 days of approval of plan; (v) Payment to Financial Creditors in One Time Settlement scheme - to be paid in 2 instalments without any moratorium period and interest payment. (vi) Resumption of Operation of the Corporate Debtor after required capital addition, repairs and maintenance of plant & machinery and infusion of working capital support for required capacity utilization. It is estimated that total required investment for the revival of operations of the Hindustan Newsprint Limited (Corporate Debtor) shall be Rs. 27150 Lakhs. This in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided into 10 Crore Equity Shares of Rs. 10 each The issued, subscribed and paid-up equity share capital of Rs. 99.99 Crores divided into 9.90 Crore Equity Shares. The existing pre-CIRP shareholding of the Corporate Debtor shall stand cancelled without any further act or deed pursuant to the Resolution Plan. The Resolution Applicant would subscribe to the equity shares of the Corporate Debtor by way of upfront equity infusion of INR 14560.17 lakhs. Pursuant to the same, the Resolution Applicant (along with its affiliates/nominees) shall hold 100% of the share capital of the Corporate Debtor and acquire control of the Corporate Debtor as shown below: Before the approval of the Resolution Plan After the approval of the Resolution Plan Name of the shareholder Percentage of Holding Name of the shareholder Percentage of Holding Hindustan Paper Corporation Ltd 100% Government of Kerala / KINFRA 100% Shri Rokkam Goapala Rao - Managing director and Shashikanth Jain - Ex MD Cum Chairman of HPC - Nominee shareholders holding shares of 100 share each Nominee Shareholder or any other holding shall be decided by the Government of Kerala after the approval of the Resolution Plan. E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Claims 3,046.32 3,046.32 3,046.32 1,070.05 Operational Creditors-Traines 343.75 199.12 199.12 69.94 Operational Creditors- Government ducs other than PF Claims 5,837.79 5,837.79 5,837.79 952.21 Operational Creditors-Suppliers 13,433.81 11,184.99 11,184.99 1,524.40 Operational Creditors - Other Creditors 4,586.68 893.31 893.31 145.71 Operatioonal Creditors - Total (C) 40,821.91 30,756.13 30,756.13 7,097.67 Feel for Monitoring, Documentation and Fillng of Implementation (D) 20 20 TOTAL PROPOSED OUTLAY OF FUNDS (A) + (B) + (C) + (D) 14,560. l7 G. Overall payment under the Plan: Resolution Plan contemplates following payments for the insolvency resolution of the Corporate Debtor as a going concern: Sl. No. Type of Outstanding debt Amount to be adjusted during 1st Funding - within 30 days Amount to be adjusted during 2nd funding - within 45 days Total Amount proposed to be paid (Rs.in lakhs) 1 CIRP Cost 212.40 0 212.40 2 Operational Creditors 3467.63 3630.04 7097.67 3 Financial Creditors 3600.06 3630.04 7230.10 4 Fees for Monitoring, Documentati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the Resolution Plan meets the requirement of Section 30 (2) of the Code in the following manner: A. Plan provides for the priority payment of CIRP costs in full from the fund to be infused by the Resolution Applicant. B. To pay the Operational Creditors of the Corporate Debtor in the manner indicated supra. It is submitted that the average Liquidation Value of the Corporate Debtor is INR 16,270 lakhs and average Fair Market Value is INR 44,334 lakhs. In view of the fact that the claim of Secured Financial Creditors and workmen is INR 26,896.74 lakhs, the minimum Liquidation Value to the Operational Creditors would be NIL. The Resolution Plan provides 35.13% of the admitted dues of the Secured Financial Creditors and Workmen, and 16.13% of the admitted debts of the Operational Creditors. 10. The Resolution Application provides for management of the CD after approval of the resolution plan for operations of the Corporate Debtor in terms of Section 30(2)(c). The Plan also provides for implementation and supervision of the Resolution Plan as per Section 30(2)(d). The Resolution Applicant has given a declaration that the Resolution Plan does not contravene any provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated the Resolution Plan has been approved by the CoC in its meeting held on 24.12.2020 with 92.72% voting right. 12. In A. Sashidhar v. Indian Overseas Bank & Others: 2019 SCC Online SC 257 (- (2019) 12 SCC 150) the Hon'ble Apex Court held that if the CoC had approved the Resolution Plan by requisite percent of voting share, then as per section 30(6) of the Code, it is imperative for the Resolution Professional to submit the same to the Adjudicating Authority (NCLT). On receipt of such a proposal, the Adjudicating Authority is required to satisfy itself that the Resolution Plan as approved by CoC meets the requirements specified in Section 30(2). The Hon'ble Court observed that the role of the NCLT is 'no more and no less'. The Hon'ble Court further held that the discretion of the Adjudicating Authority is circumscribed by Section 31 and is limited to scrutiny of the Resolution Plan "as approved" by the requisite percentage of voting share of financial creditors. Even in that enquiry, the grounds on which the Adjudicating Authority can reject the Resolution Plan is in reference to matters specified in Section 30(2) when the Resolution Plan does not conform to the stated req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , shall obtain all necessary approvals, under any law for the time being in force, within such period as may be prescribed. iv. Henceforth, no creditors of the erstwhile Corporate Debtor can claim anything other than the liabilities referred under para 8(F) above. v. The moratorium declared under Section 14 of the Code shall cease to have effect from this date. vi. This Bench hereby discharges Shri Kumar Rajan from the duties of Resolution Professional and the RP is directed to handover all records, premises/ factories/documents to Resolution Applicant to finalise the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records/premises/factories/ documents through Resolution Professional to finalise the further line of action required for starting of the operation. vii. The directions embodied and period of implementation provided herein above shall be effective from the date of this Order. viii. The Applicant and the Monitoring Committee shall supervise the implementation of the Resolution Plan and the Applicant shall file status of its implementation before this Tribunal. ix. Certified copy of this Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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