NCLT Approves Plan For Galada Power And Telecommunications Ltd.: NCLT Hyderabad

The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Shri Dr. N. V. Rama Krishna Badarinath (Judicial Member) and Shri Satya Ranjan Prasad (Technical Member), while adjudicating a petition filed in Stressed Assets Stabilisation Fund, Mumbai vs. M/s. Galada Power and Telecommunications Ltd., has approved the Resolution Plan submitted by M/s. Amrutha Constructions Pvt. Ltd. for M/s. Galada Power and Telecommunications Ltd. The Resolution Plan is valued at Rs. 42.13 Crores.

BACKGROUND FACTS

In 1972, M/s. Galada Power and Telecommunications Ltd. (“Corporate Debtor”) was incorporated in Hyderabad. The Corporate Debtor is engaged in the manufacturing of the rolling Aluminium EC Rods by continuous casting process to cater to the requirements of the manufacturers of Electrical Overhead Conductors [Aluminium Conductor Steel ReInforced (ACSR)] and Electrical Transformers. Later, the Corporate Debtor developed 6201 Aluminium Alloy Rods for the manufacture of All Aluminium Alloy Conductors (AAAC) at Uppal, Hyderabad.

Stressed Assets Stabilisation Fund filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor.

On 14.08.2019, the NCLT admitted the petition and initiated CIRP against the Corporate Debtor.

M/s. Amrutha Constructions Pvt. Ltd. (“Successful Resolution Applicant/SRA”) submitted a Resolution Plan for the Corporate Debtor, which was approved by the Committee of Creditors (“CoC”) with 100% voting share. 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 fair value of the Corporate Debtor is Rs. 33.83 Crores and Liquidation value is and Rs. 21.54 Crores. The Resolution Plan is valued at Rs. 42.13 Crores.

The SRA is a company which possesses experience in the Aluminium Conductor market and has a net worth is Rs. 265.37 Crores as on March 2021.The Resolution Plan proposes to acquire the Corporate Debtor as a going concern including all fixed assets of the same. The SRA has proposed to Rs. 8.70 Crores towards repairs, refurbishment and Working Capital for revival of the Corporate Debtor.

The resolution plan proposes to pay the Secured Financial Creditors an amount of Rs. 29.32 Crores against an admitted claim of 2107.28 Crores. The Operational Creditors such as the Government will be paid Rs. 8.62 Lakhs as against an admitted claim of Rs. 345.01 Lakhs. The Workmen of the Corporate Debtor are to be paid Rs. 17.83 Lakhs as against an admitted claim of Rs. 18.26 Lakhs. The Employees of the Corporate Debtor are to be paid Rs. 31.19 Lakhs as against an admitted claim of Rs. 71.16 Lakhs. While the other Operational Creditors will be paid Rs. 3.11 Lakhs as against an admitted claim of Rs. 124.30 Lakhs.

The Related Party of the Corporate Debtor have been paid NIL.

NCLT VERDICT

The Bench has approved the Resolution Plan of M/s. Amrutha Constructions Pvt. Ltd. for M/s. Galada Power and Telecommunications Ltd.

Case Title: Stressed Assets Stabilisation Fund, Mumbai vs. M/s. Galada Power And Telecommunications Ltd.

Case No.: CP(IB) No.384/7/HDB/2018

Counsel For the RP: Mr. V.V.S.N. Raju (Advocate) and Mr. Praveen Kumar Jain (Advocate).