The fate of 2,000 workers of Gujarat NRE Coke is likely to be decided on January 8, the date fixed for the hearing by the Kolkata bench of the National Company Law Tribunal (NCLT) after the committee of creditors rejected a sole bid for the company.
Gujarat NRE Coke has two metallurgical coke plants in Khambhalia and Bhachau in Gujarat while its third plant is in Karnataka's Dharwad. The company also has an 87.5-Mw wind power energy asset and a mini steel mill in Gujarat, which recycles steel scrap using green wind energy to manufacture TMT Bars.
Ahmedabased-based Rare Asset Reconstruction Pvt Ltd was the sole bidder for Gujarat NRE Coke. The bid was, however, rejected by the committee of creditors even though it was higher than the liquidation value of Rs 3.62 billion. The 270-day deadline for a resolution under the Insolvency and Bankruptcy Code (IBC) ended on January 1 for Gujarat NRE Coke.
On December 22, resolution professional Sumit Binani had filed an application before the NCLT for an extension beyond the 270-day period, the first case in the country where such a submission was made, but it was turned down.
Under IBC rules, the application for a resolution plan will have to be filed with the NCLT within 180 days and an extension of 90 days can be granted. If a resolution is not arrived at within the time period, then the company may be liquidated.
The application for extension was filed on the basis that there were at least four-five expressions of interest for Gujarat NRE Coke but not enough time to do due diligence.
The workers had also submitted a resolution plan on December 30 but it could not be formally placed before the committee of creditors, Binani said. The NCLT was informed of the plan, however.
The existing promoter, Arun Jagatramka, also planned to submit a resolution plan, till the Ordinance practically debarring promoters was promulgated. Jagatramka, who owns 26 per cent of Gujarat NRE Coke, is now weighing options.
Incidentally, it was Gujarat NRE Coke that filed an application for initiation of Corporate Insolvency Resolution Process (CIRP). "There was no compulsion. It was because of the uncertainty and the interest due to banks was accumulating," explained Jagatramka.
Gujarat NRE Coke owes banks around Rs 55 billion inclusive of interest. Jagatramka said that a resolution plan was submitted to banks in July. "The NPV of recovery to banks was Rs 12 billion with an option to increase equity to 42 per cent," he said. At present, banks own around 33 per cent in Gujarat NRE Coke.
Gujarat NRE Coke has two metallurgical coke plants in Khambhalia and Bhachau in Gujarat while its third plant is in Karnataka's Dharwad. The company also has an 87.5-Mw wind power energy asset and a mini steel mill in Gujarat, which recycles steel scrap using green wind energy to manufacture TMT Bars.
Ahmedabased-based Rare Asset Reconstruction Pvt Ltd was the sole bidder for Gujarat NRE Coke. The bid was, however, rejected by the committee of creditors even though it was higher than the liquidation value of Rs 3.62 billion. The 270-day deadline for a resolution under the Insolvency and Bankruptcy Code (IBC) ended on January 1 for Gujarat NRE Coke.
On December 22, resolution professional Sumit Binani had filed an application before the NCLT for an extension beyond the 270-day period, the first case in the country where such a submission was made, but it was turned down.
Under IBC rules, the application for a resolution plan will have to be filed with the NCLT within 180 days and an extension of 90 days can be granted. If a resolution is not arrived at within the time period, then the company may be liquidated.
The application for extension was filed on the basis that there were at least four-five expressions of interest for Gujarat NRE Coke but not enough time to do due diligence.
The workers had also submitted a resolution plan on December 30 but it could not be formally placed before the committee of creditors, Binani said. The NCLT was informed of the plan, however.
The existing promoter, Arun Jagatramka, also planned to submit a resolution plan, till the Ordinance practically debarring promoters was promulgated. Jagatramka, who owns 26 per cent of Gujarat NRE Coke, is now weighing options.
Incidentally, it was Gujarat NRE Coke that filed an application for initiation of Corporate Insolvency Resolution Process (CIRP). "There was no compulsion. It was because of the uncertainty and the interest due to banks was accumulating," explained Jagatramka.
Gujarat NRE Coke owes banks around Rs 55 billion inclusive of interest. Jagatramka said that a resolution plan was submitted to banks in July. "The NPV of recovery to banks was Rs 12 billion with an option to increase equity to 42 per cent," he said. At present, banks own around 33 per cent in Gujarat NRE Coke.
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