The Chennai bench of the National Company Law Tribunal (NCLT) has approved the ₹610 crore resolution plan submitted by Dhanuka Laboratories for city-based debt-ridden Orchid Pharma.
While clearing the plan, the NCLT also rejected the application filed by Accord Life Spec Pvt. Ltd.
Accord Life Spec is a part of the ₹1,700-crore Accord group, established by DMK MP S. Jagathrakshakan.
Accord indicated that it was ready to revise its proposal to ₹615 crore, given an opportunity. With the NCLT clearing the decks for Dhanuka, creditors are expected to get ₹1,116 crore, including resolution plan value of ₹610 crore, cash in the balance sheet (around ₹330 crore) and fixed deposit money with SBI (₹184 crore). It may be noted that U.S.-based Ingen Capital LLP quoted ₹1,490 crore in the first attempt of the insolvency process. The plan, however, came a cropper when the U.S. firm failed to make the committed upfront payment. Ingen Capital’s resolution plan was approved by the NCLT on September 17, 2018.
As per the approved resolution plan, Ingen Capital was expected to deposit ₹1,000 crore upfront to the financial creditors. However, Ingen sought more information, which was not allowed by the resolution professional. The Dhanuka plan was earlier caught in an unusual conundrum when Punjab National Bank (International) Ltd., a member of the CoC (committee of creditors), sought a change in their e-voting to “dissenting” after the resolution was voted in favour by the CoC with 67.07% voting share.
Voting percentage
Once this change is considered, the voting for the Resolution Plan would be 65.53% (the required percentage of voting, however is 66%). Following legal advice, the resolution professional chose to file Dhanuka’s plan with the NCLT and sought guidance with regard to accepting the change in stand by Punjab National Bank (International) and on the treatment of voting percentage.
Besides Gurgaon-based Dhanuka and Chennai-based Accord, Hyderabad-based Covalent Laboratories too was in the fray for Orchid.
Dhanuka is a prominent manufacturer and exporter of oral cephalosporin APIs. Covalent is also specialised in manufacturing cephalosporins and its intermediates.
In August 2017, the NCLT ordered insolvency proceedings against Orchid in a case filed by Lakshmi Vilas Bank. The company reportedly owed ₹3,200 crore to a consortium of 24 banks.
Orchid figured in the second list of RBI that had the names of 28 large defaulters.
