NCLT approved the Resolution Plan for M/s Primuss Pipes & Tubes Ltd., emphasizing its adherence to IBC compliance and creditor repayment mandates.
The National Company Law Tribunal (NCLT), Allahabad Bench, comprising Praveen Gupta (Judicial Member) and Ashish Verma (Technical Member), approved the Resolution Plan based on its compliance with the Insolvency and Bankruptcy Code, including adequate provisions for creditor repayment and CIRP costs. The NCLT Bench emphasized that, in addition to adhering to statutory and regulatory requirements, strict compliance with these conditions is necessary to avoid forfeiture of the Performance Bank Guarantee.
In the matter of M/s Primuss Pipes & Tubes Ltd., the National Company Law Tribunal (NCLT) has addressed an interlocutory application IA No.568/2023 filed by Mr. Sanyam Goel, the Resolution Professional (RP). This application sought approval for the Resolution Plan in accordance with Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) and Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The proceedings commenced with Company Petition CP (IB) No.7/ALD/2021, initiated by M/s Anjali Capfin Pvt. Ltd. under Section 7 of the IBC. The Adjudicating Authority admitted the Corporate Insolvency Resolution Process (CIRP) on 13.06.2022, appointing Mr. Goel as Interim Resolution Professional, later confirmed as RP during the initial Committee of Creditors (CoC) meeting.
The RP's public announcement on 15.06.2022 solicited creditor claims by 27.06.2022. Following this, the CoC was constituted on 05.07.2022, comprising Anjali Capfin Pvt. Ltd., Bank of Baroda, and Kotak Mahindra Bank Ltd. Eleven CoC meetings were held during the CIRP. Notably, Form G was published during the 2nd CoC meeting on 19.08.2022, inviting Expressions of Interest (EOIs). Unicon Buildtech and Pioneer Engineering Industries submitted their proposals. After reviewing and discussing these plans, the CoC approved Pioneer Engineering Industries' Resolution Plan in the 11th CoC meeting on 27.10.2023, with 79.10% voting in favor. This approved plan included a comprehensive payment schedule and provisions to address CIRP costs and creditor settlements.
The approved Resolution Plan, estimated to total approximately Rs. 18 Crore, involved funding through Equity/Preference Shares and a mix of secured and unsecured loans/debentures by the Resolution Applicant. The plan adhered to Section 30(2) of the IBC and various CIRP Regulations. Key compliance aspects included prioritizing CIRP costs, detailed repayment plans for operational and dissenting financial creditors, and mechanisms for post-approval management and supervision. Regulation 37 and 38 compliances were also addressed, covering asset transfers, constitutional amendments, and payment priorities.
A Monitoring Committee was proposed to oversee the implementation, comprising the Resolution Professional, financial creditors, and representatives from the Resolution Applicant. The committee's decisions would require a majority vote, with the Resolution Professional not having voting rights. The Resolution Applicant submitted an affidavit under Section 29A of the IBC confirming eligibility and provided a Performance Bank Guarantee of Rs. 3.6 Crore.
The Resolution Plan allocated funds to cover CIRP costs and repay secured financial creditors in full, with partial repayments to unsecured financial creditors and varied amounts for operational creditors. The plan also addressed fraudulent and avoidance transactions and outlined procedures for pursuing PUFE applications jointly by the Financial Creditor and Resolution Applicant. The Tribunal's analysis confirmed that the plan was viable and compliant with statutory requirements. Consequently, the Tribunal approved the Resolution Plan, subject to specified conditions and compliance with statutory obligations. Non-compliance or withdrawal of the plan could lead to forfeiture of the Performance Bank Guarantee.
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