NCLT approves Zaveri & Co’s Rs 135-crore resolution plan for Gujarat Hydrocarbons and Power SEZ

Ahmedabad-based jewellery retail chain company Zaveri & Co Private Limited has got the NCLT nod to acquire insolvent Gujarat Hydrocarbons and Power SEZ Limited (corporate debtor). The NCLT approved the Rs 135-crore resolution plan submitted by Zaveri & Co by an order dated 19 September 2023. The Resolution Plans of Zaveri & Co was approved by the committee of creditors by 100% voting shares.

As per the resolution plan, secured financial creditor will be paid a total amount of Rs 125 crore as their full and final settlement against their total verified and admitted claim(s) of Rs. 1885 crore. Out of the amount of Rs. 125 crore as proposed to secured financial creditor, an amount of Rs 40 crore will be paid within 90 days from appointed date and remaining amount of Rs. 85 crore will be paid within the total period of 15 months from the appointed date. The deferred amount paid after 90 days from the appointed date will carry an interest rate of 8% per annum on outstanding balance and the interest amount will be paid at the end of every calendar month starting from the 91st day after the appointed date and every calendar month thereafter till the full and final payment is done.

SREI Infrastructure Finance was the sole secured creditor in this case.

The resolution plan provides no payment for the claims of the sole unsecured financial creditor (Assam Company India Limited – Holding company of the Corporate Debtor) as the liquidation value of Gujarat Hydrocarbons and Power SEZ Limited is much lower than the total claim amount of the secured financial creditors.

The liquidation value for Gujarat Hydrocarbons and Power SEZ Limited arrived was Rs 206 crore, while the fair value for the company estimated at Rs 306 crore.

Operational creditors receive a sum of Rs 6.43 crore against their total admitted claims of Rs 189 crore. Another Rs 3 crore has been provided for stamp duty cost and Rs 50 lakh as CIRP Cost.

The resolution plan also provides for Rs 110 crore need-based capital infusion.

Infusion of fund and source of fund

Zaveri & Co through its SPV, SPE-Hold Co. and along with its nominee proposes to infuse an amount of Rs 2 crore in the form of 20,00,000 fully paid up equity shares of Rs 1000 each in Corporate Debtor Gujarat Hydrocarbons and Power SEZ.

It further proposes to infuse an amount up to Rs. 18 crore in the form of interest-free unsecured loans into the Corporate Debtor on Effective Date.

The Resolution Applicant further proposes to infuse the Interest-bearing Unsecured Loan and/or Inter Corporate Deposit with flexible repayment schedule up to an amount of Rs. 115 crore in Corporate Debtor on the Effective Date. Since, the funds are infused internally, the much-required flexibility in the terms and conditions can be built in to ensure the required support at the nascent stage for ensuring proper revival, feasibility and viability.

Further infusion towards Capex for infrastructure development amounting of Rs. 110 crore would be done based as per the proposed business plan and the same will be funded by Inter Corporate Loans and/or internal accruals. If need be, the Resolution Applicant can further raise necessary funding through securitization of rental cash-flows and stable cash-flows from various operationalized renewable power projects having proven generations and realization history.

About Gujarat Hydrocarbons and Power SEZ

The corporate debtor was incorporated in 2007 for the purpose of the development, operation and maintenance of a sector specific SEZ for providing product and product-related services for the Oil & Gas, Energy and Petrochemical Sector over an area of 450.0 Hectares in Vilayat Industrial Estate in Vagra Taluka of Bharuch District in the State of Gujarat. The Corporate Debtor received in principle approval vide letter no FI/152/2007-SEZ dated 4th February, 2008 from the Ministry of Commerce and Industry, Department of Commerce (SEZ Section). Government of India. The letter of approval granted the status of Developer to the Corporate Debtor as defined under the SEZ Act.

The insolvency proceedings against the company was started by SREI Infrastructure Finance after it defaulted on a payment of Rs 1,429 crore.

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