Mittal Corp Ltd. To Merge With Subsidiary Of Shyam Metalics & Energy, NCLT Mumbai Approves Resolution Plan

Background Facts

Mittal Corp Limited (“Corporate Debtor”) was incorporated in 1985 under the name of Jewels Steel Limited, which was later changed to Mittal Corp Limited. The Corporate Debtor is a manufacturer of stainless steel billets, blooms, rolled flats and wire rods.

On 10.11.2021, the NCLT admitted the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”).

Shyam Sel and Power Limited (“Successful Resolution Applicant/SRA”) is the subsidiary of Shyam Metalics and Energy Ltd., which is a listed company and steel manufacturer. The SRA submitted a Resolution Plan for the Corporate Debtor, which was approved by the Committee of Creditors (“CoC”) with 100% votes. Accordingly, the Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of the Resolution Plan.

Outlay Of The Resolution Plan

The claims submitted by the Corporate Debtor’s creditors were admitted by the Resolution Professional to the extent of Rs. 1767.49 Crores. The average Liquidation Value of the Corporate Debtor is 11,417.59 Lakhs and the average Fair Value is 18,013.67 Lakhs.

The Resolution Plan of SRA is valued at Rs. 351 Crores, including the CIRP Cost.

The resolution plan proposes to pay the Secured Financial Creditors an amount of Rs. 348.77 Crores against an admitted claim of Rs. 1587.51 Crores. The workmen and employees are being paid Rs. 73 Lakhs as against their admitted claim of Rs. 74 Lakhs. The Operational Creditors (Statutory/Government Dues) are being paid Rs. 1 Crore as against their admitted claim of Rs. 73.27 Crores. Other Operational Creditors are to be paid Rs. 50 Lakhs while their admitted claim stands at Rs. 105.97 Crores.

Further, any unpaid dues towards provident fund, gratuity fund and pension fund of the Workmen and Employees, which accrued after Insolvency Commencement Date, shall be paid by the SRA in full after adjusting amounts already paid (if any).

Upon implementation of the Resolution Plan, the Corporate Debtor would merge into the SRA.

NCLT Verdict

The Bench has approved the Resolution Plan of Shyam Sel & Power Ltd. for the Corporate Debtor.

Case Title: Punjab National Bank v Mittal Corp Limited

Case No.: C.P. (IB) No. 434/MB/C-II/2018

Counsel for Applicant: Adv Shyam Kapadia a/w Adv. Shweta Dubey a/w Adv. Ishita Srivastava, Adv. Ichchha i/b SD Partners.

Counsel for Respondents: Sr. Adv.Gaurav Joshi a/w Adv. Shyam Dasgupta i/b Khaitan & Co.

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