NCLT Admits Vadraj Cement Into Insolvency Resolution

The development comes after Bombay High Court withdrew its winding up order against the cement maker and transferred the case to the NCLT
NCLT Admits Vadraj Cement Into Insolvency Resolution

India’s National Company Law Tribunal (NCLT) recently admitted Vadraj Cement Ltd. into insolvency resolution after the Bombay High Court withdrew its winding up order against the company and transferred the case to the tribunal.

The Bombay High Court transferred the case to the NCLT on 18 August 2023 by recalling its winding up order dated 23 August 2018 in the matter of Beumer Technology India Private Ltd. versus Vadraj Cement, formerly ABG Cements Ltd., according to the NCLT order.

Before the case was transferred to the tribunal, Vadraj Cement’s financial creditor Oriental Bank of Commerce, now Punjab National Bank, had filed an application on 11 September 2018 for initiation of corporate insolvency resolution process (CIRP) against the company to recover its dues.

Total default amount stood at 87.45 crore rupees ($10.53 million) as on 31 August 2018, the order showed.

NCLT VERDICT

“Considering the facts and law…., this bench is of the view that in such circumstances, it is imperative that CIRP is only to be initiated in respect of the CD (corporate debtor),” the NCLT said in its order dated 2 February 2024.

The NCLT’s Mumbai bench, comprising Judicial Member K.R. Saji Kumar and Technical Member Sanjiv Dutt, admitted Vadraj Cement for insolvency resolution. The bench also appointed Pulkit Gupta from EY Restructuring LLP as the cement maker’s interim resolution professional.

In addition, the tribunal ordered Chetan Shelke, the official liquidator of Vadraj Cement, to hand over the charge as well as possession and custody of all the assets of the company to Gupta.

The initiation of CIRP against Vadraj Cement has brighten the recovery prospects for the company’s creditors. In November 2023, the Economic Times reported that Adani Group, JSW Cement and ArcelorMittal Group were interested in acquiring the bankrupt company.

IRP SEEKS CLAIM DETAILS

Meanwhile, Gupta asked Vadraj Cement’s creditors to submit their claims with proof by 16 February, according to a public announcement.

The e-mail to be used for correspondence with the IRP is cirp.vcl@gmail.com, he added.

Vadraj Cement’s CIRP is likely to be completed by 31 July, according to the announcement.

Note: $1 = 83.0124 Indian rupees

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