Foreign lenders to Zenith Infotech have been allowed a court appeal to view a valuation report of the company's cloud computing business.
A valuation of the business had been ordered by the trial court earlier.
The foreign currency convertible bond holders had filed a winding up petition against the company with the Bombay High Court earlier this year. This was after several efforts to recover their FCCB dues.
Late last year, the FCCB holders had taken out notice of motion asking the court for security of Rs 450 crore with interest from Zenith Infotech. The trial judge had said that for deciding the application, the valuation of the company's cloud computing business must be done. Ernst & Young were appointed to do the valuation.
The FCCB holders moved Court to see the valuation report for themselves to judge whether the cloud computing business was really worth Rs 598 crore, as valued by E&Y.
Zenith protested at this, saying the report had confidential information.
The bondholders then filed an appeal with a division bench of the Court asking to see the valuation report. This was allowed. The case against the Indian company was filed by Bank of New York Mellon, trustee of FCCB holders.
Zenith Infotech had issued FCCBs for $33 million, due for repayment or redemption in August 2011; a second tranche was issued for $50 million due in August.
When the maturity date for the first tranche came up and Zenith did not make any payment, it asked to pay the outstanding amount by the bond holders.
In view of cross default, a notice of acceleration was also issued declaring the 2012 bonds as due and payable.