LML to shut operations with no feasible revival
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MUMBAI: Bankers have rejected a resolution plan for Kanpur-based motorcycle maker LMLNSE -4.31 % after its top bidder Rimjhim Ispat offered about Rs 100 crore less than the liquidation value of the mothballed company.
“Lenders should get more money in liquidation,” said Anil Goel, the resolution professional.
“The resolution applicants were probably eying the real estate value of the assets. They were not serious in reviving the unit as they were not interested in continuing with workers and employees,” said Goel , who is the founder of AAA Insolvency Professional.
Bidders included Lohia Corp, Rimjhim Ispat, Panem Steel, Neil Industries and a joint offer by Dolphin Developers and Mohani Teal.
The company has about Rs 243 crore total debt, while lenders and the workmen together put up a claim of about Rs 500 crore. There is a consortium of nine secured lenders led by the State Bank of India (SBI). Other lenders include EdelweissNSE 0.97 % Asset Reconstruction Company, Bank of India, and the Stressed Assets Stabilization Fund (SASF).
The company used to employ about 2,000 workmen and employees. The final deadline to resolve the insolvency was February 24.
The highest bidder was Rimjhim Ispat, offering about Rs 270 crore fund infusion into the company, whose liquidation value is considered at least Rs 100 crore more than the revival plan. The committee of creditors, therefore, rejected the plan.
Soon a liquidation application will be filed with the Allahabad National Company Law Board that admitted the case for insolvency proceedings more than nine months ago.
Earlier, the company had itself moved the National Company Law Tribunal (NCLT) for admission under the Insolvency and Bankruptcy Code. The erstwhile scooter manufacturer lacked the technology and product range to take on competition in a crowded marketplace.
In September last year, the Allahabad High court barred parallel proceedings in the NCLT and the Debt Recovery Tribunal (DRT) in a case between the SBI and an individual guarantor.
Soon a liquidation application will be filed with the Allahabad National Company Law Board that admitted the case for insolvency proceedings more than nine months ago.
Earlier, the company had itself moved the National Company Law Tribunal (NCLT) for admission under the Insolvency and Bankruptcy Code. The erstwhile scooter manufacturer lacked the technology and product range to take on competition in a crowded marketplace.
In September last year, the Allahabad High court barred parallel proceedings in the NCLT and the Debt Recovery Tribunal (DRT) in a case between the SBI and an individual guarantor.
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