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The National Company Law Tribunal (NCLT), Chennai, has approved the Resolution Plan submitted by Karnataka’s West Coast Paper Mills to acquire the Chennai-based Uniply Decor--for a price that is less than the liquidation value.
West Coast will pay the creditors ₹28 crore; the liquidation value of Uniply has been put at ₹38.03 crore. (Pertinent to note that various courts have held that the courts shall not question the “wisdom of creditors” under NCLT proceedings.)
6 companies had submitted their Resolutions Applications to take over Uniply
The Corporate Insolvency Resolution Process in respect of Uniply Decor was initiated by the Tribunal on March 11, 2022. Six companies, including West Coast, submitted their Resolutions Applications to take over Uniply.
The NCLT order said that on December 4, the Committee of Creditors (CoC) approved the Resolution Plan submitted by West Coast Mills with a majority of 100 per cent.
It is stated that the fair value of Uniply Decor was ₹49.53 crore and liquidation value of the company was ₹38.03 crore. The total amount settled by the Successful Resolution Applicant (West Coast Mills) under the Resolutions Plan was ₹28 crore. West Coast Mills has committed to make a payment of ₹28 crore towards discharge of all the claims of the creditors against Uniply.
NCLT order lays down roadmap for Uniply Decor’s revival
The Resolution Plan is hereby approved by this Adjudicating Authority. The Resolution Plan shall form part of this order. The Resolution Plan is binding on Uniply Decor and other stakeholders involved so that the revival of Uniply Decor shall come with immediate effect, the order said.
West Coast Paper Mills Limited is one of the oldest and the largest producers of paper for printing, writing, and packaging in India. Established in 1955, the Mill is located at Dandeli in Uttara Kannada district in Karnataka. For fiscal ending March 31, 2023, the company reported a net profit of ₹587 crore on revenue of ₹2,810 crore.
On the National Stock Exchange, the share price of West Coast Paper Mills’ share price at ₹695.15, up by 0.23 per cent.
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