Tilaknagar Inds arm Prag Distillery moves out of liquidation process
Prag Distillery Pvt. Ltd, the wholly-owned subsidiary of Tilaknagar Industries Limited (TI) has moved out of liquidation process as a result of an order of the National Company Law Tribunal (NCLT). The said NCLT order has also allowed reinstatement of the Board of Directors of Prag Distillery for management of operations.
The distillery is situated in Andhra Pradesh and has a bottling capacity of approximately 6 lakhs cases per annum.
Tilaknagar Industries Ltd, a leading Indian-Made Foreign Liquor (IMFL) manufacturer and maker of the famous Mansion House brand, had previously entered into an agreement with Standard Chartered Bank, the financial creditor of the distillery, to settle all outstanding dues of the entity. As per the agreement, an amount of $2,250,000 was paid to Standard Chartered Bank by Tilaknagar Industries on behalf of the corporate debtor.
Tilaknagar Industries had also entered into a settlement agreement with the only other financial creditor of Prag Distillery, DCB Bank Ltd., and settled their dues in full. In addition, the company paid an amount of approximately Rs 14 crore to settle, in full, all the operational creditors of Prag Distillery whereas only three of them had filed their claims before the Liquidator. Tilaknagar Industries has also settled all the dues owed to the employees of Prag Distillery. As a result, the distillery will continue to provide gainful employment to approximately 100 employees.
In furtherance to its settlement, Standard Chartered Bank approached the liquidator for withdrawing the application filed against Prag Distillery which was approved by stakeholders with 100 per cent votes. Pursuant to the same, the liquidator filed an application at NCLT for withdrawal of Prag Distillery from liquidation.
In exercise of its discretionary power, the NCLT pronounced the order stating that Prag is out of liquidation and paved the way for reinstatement of the company’s Board of Directors.
The insolvency proceedings against the distillery were started by Standard Chartered Bank in 2017 after the former defaulted on a payment $2.183 million. The NCLT had ordered liquidation of the company in August 2018.
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