Yudhishthir Khatau, once a rising star in Indian shipping before his business collapsed in 2018 under a debt of some ₹2,300 crore, is on the verge of starting life afresh in an industry where he controlled three-fourth of India’s liquefied petroleum gas (LPG) shipments and was counted among the top five in this segment globally.

Varun Global Ltd, a ship management firm promoted by Khatau, has called an extra ordinary general meeting on November 9 seeking approval from shareholders to sell shares of Khatau Industries Pvt Ltd (KIPL) to raise ₹16.75 crore for paying the balance of a one-time settlement (OTS) of ₹22.75 crore to Life Insurance Corporation to settle total dues of ₹140 crore, a haircut of about 84 per cent.

The money has to be paid by November 15 to save the come from being wound-up per the Bombay high court order.

The shares of Khatau Industries are linked to the ownership, use and occupation of 2.5 floors of a commercial building known as Laxmi Building – the head office of the company- situated at upscale Ballard Estate in Mumbai.

On February 1, 2018, the Bombay High Court ordered winding up of the company on a petition brought by LIC seeking to recover unpaid dues of ₹140 crore.

During the winding-up proceedings, Varun Global and LIC agreed on a OTS offer of ₹22.75 crore , of which Varun Global paid ₹6 crore to LIC.

To resolve the winding-up, the two parties filed consent terms with Bombay High Court and per the court order of August 31 and October 14, 2021, Varun Global has to comply by depositing the balance OTS amount of ₹16.75 crore along with interest amount of ₹55 lakhs and settle unsecured creditors whose claims have been filed and approved by the court.

If the LIC OTS is not completed by November 15, 2021, the order on the winding up will be immediately implemented.

Varun Global has found buyers who have placed pay orders in escrow account with LIC for the premises by purchasing shares of Khatau Industries for ₹16.75 crore and an amount of ₹55 lakhs towards furniture and fixture to fulfil the balance outstanding OTS obligation.

The pay orders in the an escrow are conditional upon the sale, adjudication, registration and transfer of the said shares/ premises to them.

Varun Global has, meanwhile, settled the court-approved unsecured creditors.

The shipping business of Khatau-led erstwhile Varun Shipping Co Ltd, once India’s biggest liquefied petroleum gas (LPG) ship operator, was transferred to Varun Resources along with the loans pertaining to the ships, while its ship management business was vested in Varun Global, according to the scheme of arrangement and amalgamation approved by the Bombay High Court in May 2014.

Varun Shipping was delisted from the bourses on July 31, 2015, for re-listing as two separate companies — Varun Resources and Varun Global.

“Varun Resources unfortunately went into liquidation and as a result of which, the ships also came to a stop and along with that the business of Varun Global also came to a stop because it was managing the ships of Varun Resources. That’s why there has not been any business income in Varun Global,” Khatau told BusinessLine .

The primary problem that Varun Global faced was the winding-up petition filed by LIC on a loan it had taken against property.

“We have been able to negotiate an OTS with LIC and we are trying to see if we can implement that OTS by disposing off the property which LIC has got a mortgage over. If we are able to do it, that’s a positive development,” Khatau said.

What’s next for Varun Global

“That’s a little premature to say at this stage. That’s the reason why we are only calling EGM. We need to take a step at a time. The company is into a very difficult times, so we have not yet developed future plans. This was a very important pending issue and with no income we just want to get past this and once we get past this, then we will look at business plans and strategies and come back to the shareholders at an appropriate time,” he said.

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