Golden Tobacco insolvency process extended by 90 days till 22 Sep

The committee of creditors (CoC) of Golden Tobacco has approved the extension of Insolvency Resolution Process period by 90 days starting from 24 June 2023 to 22 September 2023 – 181 days to 270 days – subject to the approval of National Company Law Tribunal (NCLT) Ahmedabad. 

In an exchange filing the company said that it has filed an application under section 12 (2) of the Insolvency and Bankruptcy Code, 2016 for Extension of Insolvency Resolution Process period by 90 days before the NCLT. 

Golden Tobacco Limited is a tobacco company based in Ahmedabad, India. In June 2022, the National Company Law Tribunal (NCLT) admitted an application filed by Arrow Engineering Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC) for the initiation of corporate insolvency resolution process (CIRP) against Golden Tobacco.

Arrow Engineering Limited is a supplier of machinery to Golden Tobacco. The company had claimed that Golden Tobacco owed it a sum of Rs. 40.75 crores. After the NCLT admitted the application, a committee of creditors (CoC) was formed to oversee the CIRP.

The company owes Rs 1,551 crore to different creditors including over Rs 1,100 crore to secured and unsecured financial creditors. Arrow Engineering, which dragged the company to NCLT, has staked claims of Rs 266 crore.

Golden Tobacco is a public limited company with promoters holding at 30%. It is engaged in manufacturing and selling of cigarettes and other tobacco products. In the domestic market, the company’s offerings are grouped under the Brand families of Panama, Chancellor, Golden’s Gold Flake and Taj Chhap. It is also an exporter of cigars & cigarettes.

The company has manpower strength of around 400 employees spread across manufacturing, purchasing, processing, sales and marketing. The Company has production facility at Vadodara, Gujarat.

The company posted a net profit of Rs 7.65 crore on a revenue of Rs 42 crore. Apart from tobacco products, Golden Tobacco also operates in real estate sector.

The insolvency case of Golden Tobacco is significant because it is one of the first cases involving a tobacco company under the IBC.  Vichitra Narayan Pathak is acting as the resolution professional of the company.

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