In first resolution under pre-packed insolvency, Aquarius Fincap takes over Amrit India
In the first successful resolution of a Pre-packed Insolvency Resolution Process (PPIRP), Aquarius Fincap and Credits Private Limited has successfully won the rights to control Amrit India Limited, a trading and consultancy firm.
The Delhi bench of NCLT on 3 May 2023 approved the Rs 7.2 lakh resolution plan of Aquarius Fincap and Credits. As per the resolution plan, Aquarius Fincap and Credits has agreed to pay Rs 7.2 lakh against total dues of Rs 38 lakh. The secured financial creditors get Rs 5 lakh against their dues of Rs 12.70 lakh crore. Other creditors receive Rs 2.2 lakh against their admitted claims of over Rs 25 lakh.
The amount of Rs 5 lakh is to be paid to the financial creditor in tranches — 50% of the consideration will be paid as and when the plan is approved from the CoC members which shall be considered as the performance guarantee, and the rest of the 50% will be paid as and when the plan is approved by the NCLT.
Aquarius Fincap and Credits has net worth of Rs 545 crore as on 31 March 2022. Moreover, the new promoters and its associates will infuse the funds from its internal accruals and its own sources and the financial resources of the resolution applicant are more than sufficient to provide funds required for further business.
Amrit India had filed an application for pre-packed insolvency resolution process in November 2022. The NCLT admitted the application through an order on 28 November 2022. The corporate debtor was engaged in the trading and consultancy business, but it was not doing any business since last 2- 3 years.
It was submitted in the tribunal that the major cause of default was the trust deficit between the corporate debtor and the financial creditor, which kept increasing with the passage of time due to the non-repayment of its dues. The non-payment to the financial creditor resulted in the corporate debtor going into Pre-packaged Insolvency Proceedings under the IBC, 2016 and all this resulted in mismatch of cash flow and subsequently default in bank accounts.
A corporate debtor can file for pre-packed insolvency resolution process after seeking nod from 66% of the financial creditors. Under PPIRP, the resolution process has to be completed in 120 days.
If no resolution plan is approved by the committee of creditors within this time period, the resolution professional should, on the day after the expiry of such time period, file an application with the Adjudicating Authority for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified.
So far, six cases have been admitted under pre-packed insolvency resolution process – with GCCL Infra being the first one in September 2021.
