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National Company Law Tribunal recognized real estate and construction company Renaissance Indus Infra Following a petition by its financial creditors under the Corporate Insolvency Resolution Process (CIRP) Catalyst Trusteeship,
The lender had moved the bankruptcy court after the company defaulted on its dues of around Rs 444 crore. The Mumbai bench of the tribunal has appointed Birender Kumar Agarwal as the Insolvency Resolution Professional (IRP) to function under the Insolvency and Bankruptcy Code, 2016.
Renaissance Group The funding was initially raised by RUIPL and Renaissance India through their Special Purpose Vehicle (SPV) project Edelweiss Financial Services, As per the debt term sheet signed in 2018, the company was proposing to refinance the dues with Edelweiss and to obtain additional funds for project development expenses.
As per the debt term sheet executed between Altico Capital India and the company, Altico had agreed to subscribe for non-convertible debentures (NCDs) amounting to Rs 390 crore and an amount of Rs 280 crore was disbursed.
Accordingly, a Debenture Trust Deed was executed in June 2018 between the Company as the Issuer and Vista ITCL India as the Debenture Trustee. In March 2021, Altico, as holder of the Debentures, transferred all its rights under the Debentures together with the underlying security interest and rights created by the debentures. Renaissance Group and other obligations in respect of these debentures in favor of the financial creditor.
Nishit Dhruv, managing partner of law firm MDP & Partners, appearing for the lender, argued that the company had started defaulting in repayment of its dues from March 2021 and from the end of every quarter thereafter. Thus, the default by the company till June 2022 is Rs 443.81 crore.
As part of its letter in March and June 2020, Renaissance Indus Infra The tribunal bench, comprising judicial member Kuldeep Kumar Karir and technical member Anuradha Sanjay Bhatia, in its order, said that it has accepted its liability but expressed its financial difficulties to pay the dues.
According to Renaissance Group, the petition is liable to be dismissed as such petition can be filed only by a debenture trustee or a financial creditor with a trustee. The financial creditor alone is not entitled to file such a petition.
However, the Tribunal has rejected this contention holding that the financial creditor is an original assignee as per the assignment agreement in March 2021 and is clearly competent to file this petition.
The company had also argued that the financial creditor has no right to file the petition as per the terms of the inter creditor agreement signed in June 2018, which has been deliberately withheld by the financial creditor while filing the petition.
According to the tribunal, this contention raised by the company is also of no merit. In this regard, the tribunal noted that the Inter Creditor Agreement of June 2018 states that the financing parties collectively intend to enter into the Debenture Trust Deed, the debenture holders and any agent of the debenture trustee and therefore can initiate legal proceedings.
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