Siva Industries promoter appeals liquidation

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Series C entrepreneur Sivasankaran, promoter of Siva Industries, filed an appeal with the National Company Law Appeals Tribunal (NCLAT), Chennai, against the recent order of the National Company Law Court (NCLT), Chennai , concerning the liquidation of Siva Industries.

The case is scheduled for Monday’s hearing.

The NCLT on August 12 ordered the liquidation of Siva Industries and rejected the lenders’ proposal to remove the company from bankruptcy proceedings. It also denied the application filed by Resolution Professional of Siva Industries.

The NCLT bench said that the Creditors Committee (CoC) and the debtor company’s promoter had not made a final decision in accordance with clause 2 of Chapter VIII of the proposed settlement. “Therefore, based on the ambiguity of the settlement terms, we cannot order the withdrawal from the corporate insolvency resolution process,” the order said.

The Chamber also concluded that the request for liquidation of the debtor company in the event of default in the proposed settlement plan goes beyond the scope of the Insolvency and Bankruptcy Code (IBC), 2016.

The promoters of Siva Industries had offered to pay 328.21 crore to the consortium of lenders led by IDBI Bank as part of a one-off settlement plan to remove the company from IBC proceedings at NCLT. Siva Industries’ debt is around 4,863 crore and the settlement plan was about a 93.5% haircut for the banks. Under the offer, which was approved by lenders in early April, developers would only pay 5 crore up front and the balance within 180 days of approval.


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