Universal Buildwell resolution plan approved by NCLT: Key highlights and creditor payouts

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Universal Buildwell

The National Company Law Tribunal (NCLT) has approved the Rs 55.6 crore resolution plan for Universal Buildwell Private Limited submitted byUniversal Aura Welfare Association, Universal Greens Buyers Association and Universal Business Park Owners Association, marking a significant step in the corporate insolvency resolution process (CIRP) that began in 2018. The resolution plan has been approved by the committee of creditors with 70.44% votes share.

Key Highlights of the Resolution Plan:

  • Revival of Projects: The resolution plan focuses on reviving three projects— Universal Aura, Universal Greens, and Universal Business Park—while proposing the liquidation of five other projects, including Universal Square, Universal Prime, The Pavillion, and Universal Trade Tower.
  • Payment to Dissenting Creditors: The plan ensures that dissenting financial creditors, including Kotak Mahindra Bank Limited and Kotak Mahindra Prime Limited, receive their dues in monetary terms within a specified timeline, as mandated by the Supreme Court in the Jaypee Kensington case.
  • Liquidation of Unsold Assets: The unsold inventory in the projects will be liquidated, and the proceeds will be distributed among creditors as per the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code (IBC).

Creditor Payouts Under the Resolution Plan:

Category of
Stakeholder
Sub-CategoryAmount
Claimed
(₹ Crores)
Amount
Admitted
(₹ Crores)
Amount
Provided
Under Plan
(₹ Crores)
% of Claim
Provided
Secured Financial CreditorsDewan Housing Finance Corporation Limited (DHFL)183.20180.6144.8124.81%
Kotak Mahindra Bank Limited13.9313.930.825.85%
Kotak Mahindra Prime Limited37.3437.342.185.85%
Small Industries Development Bank of India (SIDBI)12.429.47
Sunflame Enterprises Private Limited12.8212.82
Unsecured Financial CreditorsIndusInd Bank Limited6.826.82To be addressed in Part-II of the plan
Axis Bank Limited7.815.37To be addressed in Part-II of the plan
HDB Financial Services Limited5.024.98To be addressed in Part-II of the plan
Hero Fincorp Limited30.9830.98To be addressed in Part-II of the plan
Ms. Nisha Singh1.511.510.2315.23%
Operational CreditorsGovernment Dues171.77117.21
Employees2.181.990.4020.10%
Suppliers34.6818.132.3112.74%
Allottees (Homebuyers)Allottees under Real Estate Projects765.71571.71Delivery of flats/units

Key Modifications in the Plan:

  • Payment to DHFL: ₹44.81 crores will be paid within 180 days of the plan’s approval.
  • Payment to Kotak Mahindra Bank and Kotak Prime: ₹3 crores will be paid within 180 days of the plan’s approval.
  • Liquidation of Unsold Inventory: The unsold inventory in the Universal Business Park and The Pavillion projects will be liquidated, and the proceeds will be distributed among creditors.

Monitoring Committee:

A Monitoring Committee will be constituted to oversee the implementation of the resolution plan, chaired by a retired judge. The committee will include representatives from the resolution applicant, lenders, and the three buyers’ associations.

Conclusion:

The NCLT’s approval of the resolution plan for Universal Buildwell marks a significant milestone in the insolvency process. The plan ensures that dissenting financial creditors are paid in monetary terms, while the revival of key projects aims to maximize the value of the corporate debtor’s assets. The liquidation of unsold inventory will further ensure that creditors receive their dues as per the provisions of the IBC.

Also See: NCLT orders liquidation of Ernakulam-based Greenlace Builders and Developers

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