June 21, 2021 1:23:51 am
The hearing on the proposal of the lenders to go for one-time settlement (OTS) at a huge haircut and withdraw bankruptcy proceeding against Siva Industries is expected to come up before the National Company Law Tribunal (NCLT) this week.
The NCLT had last week asked the lenders to explain the huge haircut in one-time settlement plan approved by the Committee of Creditors (CoC). As part of the proposal, banks will get only 6.5 per cent of the total debt of Rs 4,863 crore from the settlement offer made by C Sivasankaran, promoter of Siva Industries. Sivasankaran has offered to pay only Rs 5 crore upfront and the balance within 180 days of approval.
Banks have filed an application under Section 12A of Insolvency and Bankruptcy Code 2016 (IBC) for withdrawing the insolvency proceedings and settle with Sivasankaran for Rs 323 crore. This means a huge haircut of 94 per cent for the banks. If NCLT approves the OTS deal, the promoters will get back the company.
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