People said the company has deposited Rs 110 crore with lenders to show its commitment to repay the loan. Kolkata-based HNG was admitted for insolvency proceedings at the behest of DBS Bank In October last year. HNG did not respond to ET’s mailed query.
Offered settlement under Section 12A of the Insolvency and Bankruptcy Code (IBC) This provision empowers the Tribunal to withdraw an application from insolvency proceedings if 90% of the lenders agree to the value.
The promoters have tied up with the group to finance the settlement, which includes their contribution of around ₹400 crore and funding of ₹1,000 crore. Edelweiss Asset Reconstruction Company (ARC), which had secured loans from HSBC and HSBC in the past, accounts for 23% of HNG’s debt.
, which has the highest risk of 38%, strongly supports the 12A plan. A draft report on transaction audit, done by BDO India, does not give a clean chit to the company,” said a third person aware of the matter.
In 2019, promoters offered ₹1,710 crore through one-time settlement; Last June, it made a revised settlement proposal of ₹1,400 crore. Both the proposals failed, following which the National Company Law Tribunal (NCLT) accepted the resolution of the outstanding debt of the company. The promoter could not comply with the payment deadline in 2019, while talks with lenders broke down last year after some banks wanted higher payments.
EY-backed resolution professional Girish Juneja has accepted Rs 3,338 crore in claims from financial creditors. The promoter’s offer of ₹1,380 crore would amount to a recovery of 41%. If 10% equity and another ₹550 crore that lenders have appropriated in the last two years are added to the settlement proposal, the lenders recover around 60%.
Last month, the Supreme Court’s decision to allow Sivasankaran debt settlement for Siva Industries has encouraged promoters to gain control of their companies by applying under the appropriate provisions of the law. Shiva Industries also settled the matter under 12A of IBC.
HNG has received Expressions of Interest from
Chem, Danish beer maker Carlsberg, and AGI Greenpack, formerly known as a manufacturer of sanitaryware products. Kotak Special Situations Fund and two private equity funds – Oaktree Capital and Cerberus – also submitted expressions of interest. Juneja has invited firm offers till July 23.