The National Company Law Appellate Tribunal (NCLAT) has lifted the stay on the constitution of Committee of Creditors (CoC), which it had granted earlier in the insolvency resolution process of Hindusthan National Glass and Industries Ltd (HNG).
In its order dated January 18, NCLAT has not only directed the Interim Resolution Professional (IRP) to take steps for the constitution of CoC but also maintain the timeline of completion of CIRP proceedings.
Also, the Kolkata bench of NCLT had admitted the application for initiating Corporate Insolvency Resolution Process (CIRP) against HNG in October 2021. The CIRP was initiated against the company by one of its financial creditors, DBS Bank Ltd, which had extended external commercial borrowings (ECBs) of up to $20 million and $40 million.
Appeal against the NCLT order
However, the company’s promoter director had filed an appeal against the NCLT order in NCLAT. Based on the appeal, NCLAT had passed an order whereby the constitution of CoC was stayed.
“This Bench of this Tribunal invoking inherent power and hereby ordered to vacate the interim order dated October 28, 2021, passed by this Bench in company appeal whereby the constitution of CoC stayed. This Bench further directs the IRP to take steps for constitution of CoC and also maintain the time line of completion of CIRP proceedings,” NCLAT said in its recent order.
Based on a loan restructuring carried out some years back, HNG owes a consortium of 12 banks and lenders led by the State Bank of India around ₹1,710 crore. It paid off around ₹290 crore of the dues, and despite two extensions, defaulted on the payments, filings by DBS Bank reveal.
Kolkata-based HNG had been facing issues of high debt for quite some time now. Its auditors had also been flagging off concerns relating to the accumulated losses and eroded net worth.