The National Company Law Tribunal (NCLT), Kolkata Bench, has approved Independent Sugar Corporation Limited's (INSCO) resolution plan for Hindustan National Glass & Industries Limited (HNGIL). The plan, valued at Rs 2,257.83 crore, was approved by the Committee of Creditors (CoC) with a 96.16% voting share.

Key Details of the Resolution Plan

• Total Plan Amount: Rs 2,257.83 crore against total admitted claims of Rs 3,785.55 crore
• Recovery Rate: 59.64% of admitted claims
• Upfront Cash Payment: Rs 1,901.55 crore
• Deferred Payment: Rs 356.28 crore over three years
• Capital Expenditure Commitment: Rs 1,000.00 crore for rebuilding furnaces and equipment

Financial Proposal Highlights

Breakdown of Operational Creditors:

• Suppliers: Rs 43.46 crore
• Government dues: Rs 6.55 crore
• Workmen and employees: Rs 0.54 crore

Implementation and Management

• A Monitoring Committee will be constituted to manage HNGIL until the plan's implementation
• INSCO will reconstitute the Board of Directors after the plan's implementation
• Existing shareholders' equity will be fully extinguished

Other Key Points

• The plan includes a proposed merger of INSCO's Special Purpose Vehicle (SPV) with HNGIL
• INSCO has obtained approval from the Competition Commission of India (CCI) for the acquisition
• The NCLT has granted certain reliefs and concessions as part of the plan approval

Background

The approval comes after a complex legal journey, including challenges to an earlier plan by AGI Greenpac Limited, which was set aside by the Supreme Court due to lack of prior CCI approval. INSCO's plan was subsequently reconsidered and approved by the CoC in compliance with the Supreme Court's directives.

NCLT Member (Judicial) Deep Chandra Joshi and Member (Technical) Banwari Lal Meena emphasized the limited scope for judicial intervention in the commercial aspects of the resolution plan, as established by various Supreme Court judgments.

The resolution professional, Mr. Girish Siriram Juneja, has been directed to hand over all records and documents to INSCO for implementing the plan. The moratorium imposed under the Insolvency and Bankruptcy Code has ceased with immediate effect.

This approval marks a significant step towards the revival of Hindustan National Glass & Industries Limited, one of India's leading glass manufacturers.

In a significant development for Hindustan National Glass & Industries , the National Company Law Appellate Tribunal (NCLAT) has set aside a previous directive from the National Company Law Tribunal (NCLT) regarding the company's insolvency proceedings.

Key Points of the NCLAT Decision

• Reversal of RP Change: The NCLAT has overturned the NCLT's direction to change the resolution professional (RP) of Hindustan National Glass & Industries.
• Bid Consideration: The appellate tribunal has instructed the NCLT to decide on bids in accordance with the Supreme Court's directions.
• Timeline for Resolution Plan: The Committee of Creditors (CoC) has been given a two-week window to consider the approval of Independent Sugar Corporation's resolution plan.

Supreme Court's Involvement

The NCLAT's decision aligns with a Supreme Court order, which appears to have set specific guidelines for the resolution process of Hindustan National Glass & Industries.

Implications for Stakeholders

This ruling is crucial for all parties involved in the insolvency proceedings of Hindustan National Glass & Industries:

1. For the Company: The decision maintains continuity in the resolution process by retaining the current resolution professional.
2. For Bidders: Particularly for Independent Sugar Corporation, whose resolution plan is now up for consideration within a defined timeframe.
3. For Creditors: The CoC must act swiftly to adhere to the two-week timeline for considering the resolution plan.

The NCLAT's intervention underscores the complex nature of insolvency proceedings and the importance of adherence to judicial directives in corporate restructuring cases. Stakeholders of Hindustan National Glass & Industries will be closely watching the developments as the NCLT proceeds to decide on the bids as per the Supreme Court's guidelines.