The sale of bankrupt Sical Logistics Ltd, earlier owned by the Coffee Day Group, under the Insolvency and Bankruptcy Code (IBC) has attracted 26 bidders, but potential buyers are spooked by a lenders' decision to pull out two key subsidiaries and sell them separately mid-way through the process.
Just a fortnight before the bidders, including Allcargo Logistics Ltd and Pristine Logistics & Infraprojects Pvt Ltd, were asked to file a resolution plan for Sical Logistics, the resolution professional launched a separate auction process in September for the sale of entire equity interest of 53.6 per cent held by Sical Logistics in Sical Infra Assets Ltd and 97.5 per cent in Patchems Pvt Ltd, according to a document seen by
Sical Infra Assets Ltd is the holding company for Sical Multimodal and Rail Transport Ltd (SMART) that has a Category 1 licence from the Ministry of Railways, to run container trains throughout the Indian Railways network in both the export-import and domestic trade.
SMART operates seven rakes and is also constructing two rail-linked terminals at Bengaluru and Chennai.
Patchems is an integrated third-party logistics services firm focussed on pharmaceuticals, medical devices, life-saving products and consumer healthcare industries.
The 26 eligible bidders for Sical Logistics as well as other bidders are allowed to participate in the all-cash auction process for the sale of equity in the two subsidiaries, which was approved by the committee of creditors.
The move led to protests from qualified bidders for the corporate insolvency resolution process (CIRP) of Sical Logistics, with one of them filing a petition before the National Company Law Tribunal (NCLT) seeking to reverse it, multiple sources with knowledge of the matter said.
“The resolution process of Sical Logistics will lose its charm if the stakes in subsidiaries are sold separately,” said a source. “These are significant subsidiaries. Why would anybody be interested in the resolution process of Sical Logistics at the corporate level,” he said.
Industry sources said share sale in the subsidiaries amounted to liquidation of the company mid-way through the resolution process of the corporate debtor.
“The subsidiaries are part of the parent company Sical Logistics. Let the resolution process for the parent get over. If that fails, they can go for auction or liquidation. But why should they derail bidders who are interested in the ongoing resolution process of Sical Logistics as a going concern,” the source asked.
“The best way to revive Sical Logistics is through a resolution plan for the company as a going concern,” he said.
In March this year, NCLT ordered start of CIRP under the bankruptcy law against Sical Logistics.
Mumbai-listed Sical Logistics owes Rs 1,599.50 crore to a clutch of banks and financial institutions including Bank of Baroda, YES Bank Ltd, RBL Bank Ltd, IDFC Bank Ltd, among others. Of this, the resolution professional has admitted Rs 1,574.06 crore.
The Coffee Day Group acquired Sical Logistics from the Chennai-based MA Chidambaram Group in September 2011 through its subsidiary Tanglin Retail Realty Developments Pvt Ltd.