NCLT approves JSW Infra’s Rs 467 cr resolution plan for NCR Rail Infrastructure

The Mumbai Bench of the National Company Law Tribunal (NCLT) has approved the resolution plan submitted by JSW Infrastructure Limited for the acquisition of NCR Rail Infrastructure Limited (formerly Arshiya Rail Infrastructure Limited). The order, pronounced on Thursday, paves the way for the corporate debtor to be revived as a going concern. The resolution plan, which was approved by the Committee of Creditors (CoC) with a unanimous 100% voting share, entails a total plan value of approximately Rs 467.47 crores.

JSW Infrastructure has proposed an upfront payment of Rs. 426 Crores to the financial creditors. In a unique financial restructuring move, the balance principal outstanding will be converted into Redeemable Preference Shares (RPS) and simultaneously sold to the resolution applicant for an additional Rs. 34 Crores.

The corporate debtor, NCR Rail Infrastructure, owns and operates a Private Freight Terminal (PFT) in Khurja, Uttar Pradesh. The resolution plan aims to maximize the value of these assets, providing a significant boost to the logistics capabilities in the region. The company was admitted into the Corporate Insolvency Resolution Process (CIRP) on March 7, 2024, following a petition filed by financial creditor Edelweiss Asset Reconstruction Company Limited.

A two-member bench comprising Hon’ble Member (Judicial) Ashish Kalia and Hon’ble Member (Technical) Sanjiv Dutt passed the order, allowing the plan under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.

Key aspects of the resolution plan

• Stakeholder payments: The plan provides for the payment of CIRP costs, Rs. 99.33 lakhs to employees and workmen, and Rs. 75 lakhs to other operational creditors.
• Implementation monitoring: An Implementation and Monitoring Committee (IMC) will be constituted to oversee the execution of the plan. The Resolution Professional (RP), Mr. Pankaj Mahajan, will submit quarterly progress reports to the tribunal.
• PUFE transactions: The tribunal directed that any recovery from pending proceedings related to fraudulent or wrongful trading (Section 66 applications) shall remain with the corporate debtor. The Successful Resolution Applicant (SRA) will pursue these applications at its own cost.
• Reliefs and concessions: While approving the plan, the NCLT clarified that reliefs falling under the domain of other government departments must be dealt with by the respective competent authorities. It also provided specific directions regarding tax implications, statutory filings, and the continuation of business permits.

The tribunal emphasized the “commercial wisdom” of the CoC, noting that the scope of judicial review is limited to ensuring the plan meets the requirements of Section 30(2) of the IBC. With this approval, the moratorium declared under Section 14 of the Code ceases to have effect, and the RP stands discharged from his duties, handing over control to the SRA.

JSW Infrastructure, part of the JSW Group and the second-largest private port operator in India, will now take over the management and operations of NCR Rail Infrastructure, aiming to integrate the freight terminal into its wider logistics network.

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