The National Company Law Tribunal (NCLT), Chennai on Thursday reserved its order on the one-time settlement offer between promoters of Siva Industries & Holdings Ltd. and lenders.
Last week, NCLT had sought an explanation from lenders on the rationale behind accepting the offer.
As per the proposal, claims worth about ₹4,200 crore are proposed to be settled through payment of ₹323 crore by Siva Industries and ₹555 crore from third-party guarantors.
In 2019, the NCLT had admitted insolvency proceedings against the C.Sivasankaran-promoted company in a case filed by IDBI Bank Ltd.
Later, the majority of the committee of lenders had approved a one-time settlement offer from the promoters, which had been filed before the NCLT as per Section 12A of the Insolvency and Bankruptcy Code (IBC).
At the June 24 hearing, Siva Industries told NCLT that the settlement proposal has been made by one of its shareholders. It also said that the loans were not part of a consortium and the settlement offer was negotiated with each bank.
IDBI Bank said out of its principal dues worth more than ₹600 crore, claims worth only ₹111 crore were part of the one-time proposal negotiations, which was agreed to be settled for ₹37 crore. The bank said it is taking steps to recover the balance dues through other proceedings.
IDBI Bank also said it had two alternatives viz. either to accept the one-time settlement or go for liquidation. It would accept whichever option gives it a better recovery.
