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NCLT accepts Royale Partners' Rs 900-crore bid for EPC Construction; banks take 88% haircut

The National Company Law Tribunal gave a go-ahead to the resolution plan of Royale Partners after the Committee of Creditors accepted its Rs 900-crore bid by 73.13 per cent vote share

twitter-logo Dipak Mondal   New Delhi     Last Updated: November 25, 2019  | 22:16 IST
NCLT accepts Royale Partners' Rs 900-crore bid for EPC Construction; banks take 88% haircut

Royale Partners Investment Fund Limited, a Mauritius-based investor, has successfully bid for EPC Construction India Ltd under the Insolvency and Bankruptcy Code (IBC).

The National Company Law Tribunal (NCLT) gave a go-ahead to the resolution plan of Royale Partners after the Committee of Creditors (CoC) accepted its Rs 900-crore bid by 73.13 per cent vote share. This is against the total admitted financial creditors' claim of Rs 7,487 crore. It means bankers have taken a haircut of 88 per cent.

The bid amount of Rs 900 crore includes CIRP costs that exceed the existing cash flows and workmen's dues.

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Total claims filed by creditors stood at Rs 13,254 crore, out of which claims aggregating to Rs 7,732 crore were verified and admitted. This includes Rs 7,487 crore claims of financial creditors, Rs 245 crore claims of operational creditors and workmen claims of Rs 68 lakh.

According to Royale Partners' resolution plan, it would pay an upfront Rs 420 crore to financial creditors within 30 business days. Another Rs 480 crore would be infused later by issuing non-convertible debentures. The NCDs are proposed to be redeemed in five years.

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The average liquidation value of the company stood at Rs 840 crore.

Arcelor Mittal India Private Limited was the other bidder in this case. However, its resolution plan was rejected by the CoC.

A consortium of banks led by the IDBI Bank had moved NCLT against EPC Construction, a subsidiary of Essar Projects Ltd, in April 2018 after the latter defaulted on loans amounting to Rs 886 crore.

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