GAIL (India) resolution plan for JBF Petrochemicals approved by NCLT
The Ahmedabad bench of the NCLT has given its nod to the resolution plan submitted by public sector GAIL (India) for JBF Petrochemicals Ltd. The Rs 2079-crore resolution plan of GAIL (India) was earlier approved by the committee of creditors by 100% vote share.
Others in the fray for JBF Petrochemicals Ltd were a consortium of Indian Oil Corporation Limited and ONGC Limited and MPCI Private Limited.
The Rs 2079-crore resolution plan offers to pay the assenting secured financial creditor a sum of Rs 2,015 crore, 43.23% of the total admitted claims of Rs 4,662 crore. Assenting unsecured financial creditors get Rs 14 crore, which is 5.7% of the total admitted claims of Rs 253 crore.
The insolvency petition against JBF Petrochemicals was filed in NCLT by IDBI Bank, which was admitted by the NCLT in January 2022.
Details of the resolution plan
| Category of creditor | Sub-category of creditors | Claims submitted (Rs cr) | Claims Admitted (Rs cr) | Amounts provided for in the resolution plan (Rs cr) | % realisation |
| Secured financial creditors | Who voted in favour of the resolution plan | 4684 | 4662 | 2015 | 43.23% |
| Who did not vote in favour | NA | NA | NA | NA | |
| Unsecured financial creditors | Who voted in favour of the resolution plan | 1329 | 253 | 14.14 | 5.70% |
| Who did not vote in favour | NA | NA | NA | NA | |
| Operational Creditor | Govt | 734 | 0.057 | 0.0032 | 5.7% |
| Workmen | 3.86 | 2.89 | 2.89 | 100% | |
| Employees | 7.97 | 6.33 | 6.33 | 100% | |
| Others | 1158 | 703 | 40 | 5.70% | |
| Grand Total | 7,919 | 5628 | 2079 | 37% |
The provision towards CIRP costs is made for Rs. 21.75 crore to be paid in priority to the payment of other debts of the Corporate Debtor and hence, the provision for payment towards CIRP cost has been made.
It is stated in clause 4.2 of the resolution plan by GAIL (India) that the liquidation value is not sufficient to cover the debt of the financial creditors of the corporate debtor in full. Accordingly, disbursement to operational creditors on liquidation will be NIL. However, the resolution plan proposes a one-time cash settlement of Rs. 40.11 crore towards all admitted claims of operational creditors and the statutory creditors.
Further clause 4.5.7. of the plan provides that payment due to Dissenting Financial Creditors, if any, shall be made at least I (one) day prior to disbursement of Upfront Cash to Financial Creditors who vote in favour of the Resolution Plan. However, it is noted that there is no dissenting financial creditor.
Clause 10 of the resolution plan by GAIL (India) provides for the management and control of the business of the corporate debtor after approval of the resolution plan, wherein it is provided that upon GAIL (India) acquiring control over the Corporate Debtor, the board of directors of the Corporate Debtor shall be reconstituted with adequate representation from the members of the Resolution Applicant, in compliance with the Applicable Laws. The Board shall oversee the revival plan and business of the Corporate Debtor.
The term of the resolution plan is for a period of 89 days which shall commence on the date of the approval of the said plan by the Adjudicating Authority. It provides for the implementation schedule for payment to the creditors as envisaged in the resolution plan.
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