NCLT Admits Free Trade Warehousing Zones Operator Arshiya For Insolvency Resolution

India’s bankruptcy court admitted Punjab National Bank’s (PNB) insolvency resolution petition against free trade warehousing zones (FTWZs) developer Arshiya Ltd.

The division bench of the National Company Law Tribunal (NCLT), comprising Judicial Member K.R. Saji Kumar and Technical Member Sanjiv Dutt, passed the insolvency resolution order against the logistics and supply management service provider on 23 April, the tribunal order showed.

The development came after the state-owned lender approached the Mumbai bench of the NCLT in August 2019 to initiate the corporate insolvency resolution process (CIRP) against Arshiya, claiming a default of over 193 crore rupees ($23.16 million).

THE BACKGROUND

Arshiya is the holding company of Arshiya Northern FTWZ Ltd., which had availed loans from PNB in order to construct the FTWZ at Khurja in Uttar Pradesh state.

The loans were later restructured via a master restructuring agreement on 28 September 2013.

However, ANFL defaulted in loan repayment and its accounts became non-performing asset on 30 September 2014 and PNB sought initiation of CIRP against Arshiya as it was the corporate guarantor of ANFL.

THE VERDICT

The tribunal remarked that PNB successfully demonstrated and proved the debt and default in this case and Arshiya has also admitted the outstanding debt.

“Therefore, we are of the considered view that this application is complete and satisfies all the necessary requirements for admission under Section 7 of the IBC,” the NCLT said.

The tribunal appointed Nitin Vishwanath Panchal as the interim resolution professional of the company.

ABOUT ARSHIYA

Arshiya is India's leading integrated supply chain and logistics infrastructure solutions provider, according to its website.

The company is the only free zone developer operating two FTWZs and the largest private container train operator with pan-India operations, as well as owns the private inland container depot with the six rail loop lines, it said.

Strategically located, the company’s FTWZs – Panvel near Mumbai spread over 165 acres, catering to western India, and Khurja near Delhi, spread over 325 acres catering to north India – are well connected by rail and road networks, and co-located with domestic distriparks which facilitate duty-deferred hubbing opportunities, according to Arshiya.

Note: $1 = 83.3133 Indian rupees

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