Hyderabad-based ailing infrastructure firm IVRCL has been sold to Gabs Megacorp for Rs 1,654.77 crore under the new Insolvency and Bankruptcy Code (IBC). With this, IVRCL became the first company which has been liquidated as going concern under IBC.
The IBC now allows a company under liquidation to be sold as going concern.
IVRCL, that owed more than Rs 14,000 crore to financial and other creditors, was under liquidation as a going concern following an order by the National Company Law Tribunal (NCLT), Hyderabad bench. The NCLT had, on July 29, 2019, ordered the liquidation of the company as there was no suitor for a resolution of the firm.
The State Bank of India had initiated insolvency proceedings against the company in February 2018.
Sutanu Sinha, the resolution professional of the company during the insolvency process at the NCLT, was the official liquidator.
Earlier today, the infrastructure firm has informed the stock exchanges that it had received a bid under e-auction process for sale of the company as going concern from Gabs Megacorp Limited at a price of Rs 1654.77 crore on February 27, 2020.
"The sale would be however subject to the decision of the National Company Law Appellate Tribunal, Delhi in the matter of Company Appeal (AT) on the pending appeal against NCLT order dated 26 July 2019 read with Corrigendum order dated 31 July 2019 ordering liquidation of the company as a going concern and subject to the provisions of IBC, 2016 and liquidation regulation," IVRCL said in filing to the exchanges.
The company has obligations towards fund-based borrowings (including interest) worth Rs 9,593 crore as per books of accounts and non-fund based exposure amounting to Rs 857 crore.
At the end of December quarter of 2019, the company incurred a net loss of Rs 428.02 crore against a net loss of Rs 410.11 crore during the previous quarter ended December 2018. Sales plunged 52.19 per cent to Rs 81.75 crore in the quarter ended December 2019 as against Rs 170.99 crore during the previous quarter ended December 2018.
Currently, IVRCL's shares are under suspension from trading due to procedural reasons.