Gujarat NRE Coke Limited (GNCL)is one of the first few cases with operational plants and more than 1200 employees of India to be voluntarily referred to the Corporate Insolvency Resolution Process under the Insolvency Code.This decision by the company’s Management was a dedicated attempt with the intent to revive the company in a time bound process.Despite there being a viable Resolution Plan prepared in consultation with PricewaterhouseCooper (PwC), and submitted well within the 180 days deadline, the same could not be implemented vide IBC ordinance promulgated on 23rd Nov 2017 which blurred the difference between wilful defaulters/fraudsters and honest promoters subject to market conditions, making all promoters indiscriminately ineligible to propose a Resolution Plan for the revival of the company. Inspite of being a viable and operational company with over 1200 employees,the strict timeline of the IB Code forced the company into liquidation.But in a legal first, the Hon’ble NCLT, Kolkata Bench, recognising the viability and strength of the company ordered the liquidation as a “going concern”.
The current management is fully focused in operating the company to safeguard the interest of all the stakeholders including its 1200 employees,and workers,as well as working at various options to safeguard the interest of our more than 2 lacs shareholders.
In this connection, Mr. Jagatramka being the promoter / shareholder has proposed a scheme under section 230 of the Company Act 2013 to revive the company with the consent of all the stakeholders, including the shareholders, unsecured creditors as well as secured creditors.The proposed scheme promises partial debt repayment and partial conversion of debt to equity and preference shares as well as restructuring of the equity share capital.
Post implementation of the scheme, the company is expected to generate profits and start repayment of the debt as well as service interest to the secured lenders from the first year itself. The scheme does not propose any haircut to the debts due to the secured lenders while unsecured creditors would be offered equity shares and preference shares after some haircut, as per their respective classes.This is as against nil realization that the unsecured creditors would have got under liquidation. Similarly, equity shareholders (more than 2 lac public shareholders) would also be benefit under the scheme since the shares of the company would continue to be listed and traded actively as against being delisted in the liquidation process and further the proposed equity restructuring under the scheme would allow them to reap the benefits of future upside in equity.
At the proposal of the scheme by Mr. Arun Kumar Jagatramka, the promoter / shareholder,the Hon’ble NCLT,Kolkata Bench, was pleased to accept the application and has ordered to convene a meeting of all the stakeholders on 16th July 2018.