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JSW Steel has sought clarification from the National Company Law and Tribunal on certain operational direction made while approving its resolution plan to acquire the stressed Vardhman Industries.
The resolution plan submitted by JSW Steel was approved by the Committee of Creditors of Vardhman Industries, which has been undergoing Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 last Thursday.
Approving the resolution plan, NCLT in its order had given certain directions that could have the effect of modifying the resolution plan submitted by JSW Steel and approved by the CoC, said JSW Steel in a statement on Thursday.
These directions pertain to utilisation of receivables of Vardhman Industries, notices, assessments or other proceedings pending or threatened against Vardhman Industries and relationship and obligations of the company in relation to various subsidiaries, associates and joint ventures executed by it, JSW Steel added.
The directions of NCLT amounts to an amendment of the Resolution Plan submitted by it without seeking its consent. On this basis, JSW Steel proposes to seek a modification and clarification by the Tribunal or any other relevant forums, it added.
Further steps to be taken by JSW Steel with respect to implementation of resolution plan will depend on the clarifications by NCLT, said JSW Steel.
Vardhman Industries is a manufacturer and wholesale supplier and exporters of a wide range of galvanised tubes, coils, precision steel tubes, galvanize steel pipes, steel square tube, galvanised sheets, corrugated steel tubes, cold rolled steel sheets.
The resolution plan
As per the terms of approved resolution plan, JSW Steel will infuse ₹63.5 crore in Vardhman Industries through equity shares or debt within 30 days from date of the NCLT order. The financial creditors will receive ₹62.5 crore and the operational creditors will get ₹1 crore for the settlement of the existing Vardhman Industries debt.
After paying of dues, the entire existing shareholding of Vardhman Industries will be reduced to zero by way of a capital reduction from the effective date, the notification by JSW Steel had said.
As per the approved resolution plan, JSW Steel will be classified as the promoter of Vardhman Industries, it added.
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