ICICI Bank Limited Vs Stone India Limited (NCLT Kolkata)
Jupiter Wagons Ltd (JWL), a manufacturer of wagons, high-speed brake systems, and railway and engineering equipment, announces the approval of its resolution plan by the Kolkata National Company Law Tribunal (NCLT) to acquire a controlling stake in Stone India.
Acquisition Approval and Background
The Kolkata National Company Law Tribunal (NCLT) has granted approval to Jupiter Wagons Ltd (JWL) for its resolution plan to acquire a controlling stake in Stone India. JWL had previously acquired Stone India last year through a corporate insolvency resolution process. The acquisition amount was approximately Rs 25 crore, facilitated by the NCLT.
Stone India’s Role and Financial Distress
Stone India, a Kolkata-based company, had been supplying engineering products to Indian Railways. However, it faced financial distress leading to insolvency. Lenders, including Indian Overseas Bank, State Bank of India, and ICICI Bank, initiated the Corporate Insolvency Resolution Process (CIRP) by forming a committee of creditors. Stone India’s failure to repay its dues resulted in the filing for insolvency.
Committee of Creditors and Claims
A committee of creditors was established, consisting of lenders who held claims against Stone India. Lenders such as Indian Overseas Bank, State Bank of India, and ICICI Bank were part of this committee. The total claims submitted and admitted amounted to Rs 51.9 crore, reflecting the financial obligations faced by the company.
Operational Status and Employees
Stone India has not been operational since 2017 and currently does not have any employees. The acquisition by Jupiter Wagons Ltd (JWL) presents an opportunity to revive and restructure the company, leveraging JWL’s expertise in manufacturing wagons, high-speed brake systems, and railway and engineering equipment.
Conclusion: Jupiter Wagons Ltd (JWL) has received approval from the Kolkata National Company Law Tribunal (NCLT) for its resolution plan to acquire a controlling stake in Stone India. This acquisition signifies a significant development in the engineering products supplier’s journey, which had faced financial distress and insolvency. With the support of lenders and JWL’s expertise, there is potential for the revival and restructuring of Stone India.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
1. This Court convened through hybrid mode.
Brief facts of the case
2. The underlying Company Petition in CP (IB) No. 565/KB/2020 was filed by ICICI Bank Limited against Stone India Limited, the Corporate Debtor, under section 7 of the Insolvency and Bankruptcy Code 2016 which was admitted into Corporate Insolvency Resolution Process (“CIRP”) vide order dated 09 November 2021.
3. Initially, Mr. Mr. Kuldeep Verma was appointed as the Interim Resolution Professional (“IRP”). Subsequently, Mr. Sanjai Kumar Gupta was appointed as the Resolution Professional of the Corporate Debtor pursuant to an order dated 28 February 2022 passed in I.A. (IB) No. 40/KB/2022.
4. The IRP made public announcement on 12 November 2021 in Financial Express (English) (All India edition) and Sukhabar (Bengali) (West Bengal edition) newspapers regarding initiation of Corporate Insolvency Resolution Process and called proof of claims from the financial and operational creditors, workers and employees of the Company in the specified forms.
5. The CoC was constituted on 30 November 2021, with three Financial Creditors, being Indian Overseas Bank, ICICI Bank Limited and State Bank of India with 38.1%, 32.2% and 29.7% voting share respectively.
6. The applicant states that a total of 14 CoC meetings have been held during CIRP period.
