NCLT approves Raajratna Metals Industries’ resolution plan for Real Strips Ltd
The Ahmedabad bench of the National Company Law Tribunal (NCLT) has approved the resolution plan of Raajratna Metals Industries Limited for corporate debtor Real Strips Ltd, the Ahmedabad-based manufacturer of steel strips and coils.
The company in a regulatory filing informed the exchanges.
Here are the specific features and details of the resolution plan as approved by the Adjudicating Authority under the Insolvency Code.
Pre and Post net-worth of the company: The Pre-Net-Worth of the Company, was fully eroded and negative net worth as per audited financial statements of 31 March 2021 amounted to Rs 24.65 crore. Since the company is getting amalgamated in accordance with the approved Resolution Plan, the Post Net-Worth Criteria of Real Strips Ltd will not be applicable.
Details of assets of the company post CIRP: Since the company is getting amalgamated in accordance with the approved Resolution Plan, from the effective date of approval of the resolution plan, 4 January 2022, the assets and liabilities of the company are getting merged with the resolution applicant and hence effectively the company shall get dissolved and there would not remain any assets of the company.
Details of securities continuing to be imposed on the companies’ assets: Since the company is getting amalgamated with the resolution applicant, from the effective date of approval of resolution plan and hence there would not remain any securities continuing to be imposed on the companies’ assets.
Other material liabilities imposed on the company: As the company is getting amalgamated with the resolution applicant, from the effective date of approval of resolution plan and hence there would not remain any other material liabilities which shall be imposed on the company.
Detailed pre- and post-shareholding pattern assuming 100% conversion of convertible securities: As the company is getting amalgamated with the resolution applicant, from the effective date of approval of resolution plan the existing shareholders of the company shall be provided:
Equity share of Resolution Applicant — Raajratna Metals Industries Limited — having face value of Rs.10 each against 1,66,620 equity shares of Corporate Debtor of face value of Rs.10 each which has been determined in accordance to the Valuation carried out by an Independent Valuer, registered in accordance with The Companies Act 2013.
For all the shareholders of the Corporate Debtor — Real Strips Limited — who are not entitled for minimum one equity share of Resolution Applicant, in that case, Resolution Applicant proposes to issue Non-Cumulative Redeemable Preference share having couple rate of 0.01% of face value of Re.1 each.
The said Non-Cumulative Redeemable Preference shares shall be redeemed at face value of Re 1 between 6months to 12 months from the effective date. Effectively, there shall not remain any post shareholding of the company.
The issuance of equity shares and preference shares shall be monitored by the Monitoring Committee in accordance with the Resolution Plan.
Details of funds infused in the company, creditors paid-off: As the company is getting amalgamated with the resolution applicant, from the effective date of approval of resolution plan and hence the said clause is not applicable in case of the company.
The details of delisting plans in the resolution plan
The exchange of equity shares in the ratio, Of Equity share of Resolution Applicant having face value of Rs.10 each against 1,66,620 equity shares of Real Strips Ltd of face value of Rs.10 each
For all the shareholders of the Company who are not entitled for minimum one equity share of Resolution Applicant, in that case, they shall be issued Non-Cumulative Redeemable Preference share having couple rate of 0.01% of face value of Re.1 each.
The said Non-Cumulative Redeemable Preference shares shall be redeemed at face value of Re.1 between 6months to 12 months from the effective date of the plan. (The effective date of the Plan is 04 January 2022)
On exchange and issuance, the paid-up equity share capital of the Company will be extinguished/cancelled against the said pay-out to existing shareholders of the Corporate Debtor. The exit to the shareholders is in excess of the liquidation value, and hence the shares of the Corporate Debtor shall be automatically delisted from the stock exchange and the resolution applicant/transferee company is not under an obligation to list its shares post sanction of the Resolution Plan along-with the Scheme of Amalgamation as per the provisions of section 232 (3)(h) of the Companies Act, 2013.
On approval of the Resolution Plan/Scheme of Amalgamation, the transferee company is deemed to comply with the SEBI (Delisting of Equity Shares) Regulations, 2009.
Also See: Resolution Plans
