Jyoti Structures goes to Sanghi

Mumbai: The Mumbai bench of the NCLT on Wednesday approved the amended resolution plan for Jyoti Structures by Sharad Sanghi of Netmagic that has proposed to pay Rs 3,965 crore in 12 years to the lenders and other creditors.

Last week, the NCLAT had set aside an earlier order of the Mumbai bench to liquidate Jyoti Structures and sent the matter back to the NCLT to reconsider the resolution plan submitted by Sanghi.

According to the Rs 3,965.06-crore resolution plan by Sanghi along with others, Rs 50 crore would be paid upfront, followed by Rs 75 crore over the next 12 months and the remaining in staggered payments over the next in 15 years.

Last March, Sanghi's resolution plan was voted by 62.66 percent of lenders, while 23.12 percent voted against, and 14.21 per cent abstained. But later some lenders changed their minds and agreed to accept the proposal, taking the final tally of those lenders accepting the proposal at 81.31 percent.

But Sanghi's resolution plan was rejected by NCLT citing delays beyond the mandated 270 days and the absence of required majority of 75 percent at the March 26-27, 2018 voting.

Following this, Sanghi had in August moved the NCLAT, which last week stayed the liquidation process, saying the NCLT did not consider the eight-day gap between the firm being admitted for bankruptcy and appointment of interim resolution professional.

The appellate tribunal, staying the liquidation, also noted that the application was admitted on July 4, 2017 and was uploaded on July 12, and the interim RP joined thereafter, thus leaving an eight-day gap and that if the aforesaid period of eight days is excluded, the resolution plan was approved within 270 days which the NCLT has failed to note.

Jyoti Structures, which owes Rs 7,010.55 crore and unpaid interest to the lenders, is among the first 12 large accounts referred to NCLTs by the Reserve Bank in June 2017.

Under the amended bid, the sole bidder Sanghi, who is the managing  director and chief executive of data centre company Netmagic, told  NCLT that he will pay Rs 3,965 crore in 12 years against the original bid of 15 years to the lenders.

Further, under the revised plan, he will pay Rs 147 crore will be paid to workmen, Rs 11 crore statutory dues will be paid immediately and the rest Rs 115 crore will be paid to operational creditors over a period of seven years.

The revised bid was submitted on Monday. However, DBS Bank, which is the first charge-holder in the case, had Tuesday opposed the NCLT move to accept Sanghi's amended resolution plan and had decided to challenge the same in the Supreme Court.

(With inputs from agencies)