NCLT approves Rs 79-crore resolution plan for Leela Trade Steel and Commodities
Ritzee-Pritesh Mehta JV, a Joint Venture of Pritesh Futarmalji Mehta and Ritzee Recycling Private Limited, has successfully bid for Pune-based Leela Trade Steel and Commodities India Private Ltd.
The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the JV’s Rs 79.26 crore resolution plan. The resolution plan was earlier approved by the committee of creditors (CoC) by 100% vote share.
One of the partners in the JV — Pritesh Futarmalji Mehta – was the erstwhile promoter of the Leela Trade Steel and Commodities India Private Ltd. Since Leela Trade Steel and Commodities is classified as an MSME unit on 30th March 2018, Pritesh Mehta was allowed to participate in the bidding process.
Details of the Resolution plan
The resolution amount is Rs 79.26 crore against the total admitted creditors’ claims of Rs 169.5 crore. The liquidation value of Leela Trade Steel and Commodities was estimated to be Rs 30.57 crore and the fair value at Rs 40.93 crore.
Of the total amount of Rs 79.26 crore provided in the resolution plan, Rs 78.6 crore has been provided for secured financial creditors, who had total admitted claims of Rs 135.5 crore. Cosmos Bank, which had admitted claims of Rs 105 crore, received Rs 69 crore. JC Flowers ARC received Rs 8 crore against its total claims of Rs 27.90 crore. ICICI Bank, which is the other secured financial creditor, receives Rs 1.3 crore.
Unsecured creditors received Rs 60 lakh against their total claims of Rs 4.13 crore. Operational creditors received around Rs 8 lakh.
The amount of Rs. 70.48 crore is proposed to be paid to Cosmos Bank and ICICI Bank in installment within a period of 10 years. Also, the resolution Applicant proposes to pay interest to Cosmos Bank on the outstanding amount on reducing balance basis at the rate of 6% simple interest.
After making payment of first 2 years to Cosmos Bank, the resolution applicant will make the payment to the Cosmos Bank in quarterly installments from the third year of the order of the NCLT approving the Resolution Plan.
Arrangement for JC Flowers ARC
The Resolution Plan had contemplated a payment of Rs 18.31 crore JC Flowers ARC within a period of 10 years. However, since the ARC wanted an early exit, the successful resolution applicant proposed to pay an amount of Rs 8.10 crore within 4 quarters. Out of which an amount of Rs 3.35 crore will be paid within 90 days and the balance Rs.4.75 crore will be paid in 4 quarterly instalments.
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