The Chennai bench of the National Company Law Tribunal (NCLT) has ordered liquidation of Nagarjuna Oil Corporation (NOCL), which is an associate firm of Nagarjuna Oil Refinery. Lenders to the company had on July 24 unanimously approved its liquidation.
“The authority orders for liquidation of the corporate debtor (NOCL),” the bench in its December 11 order said, asking the company liquidator to issue a public announcement stating that the company was in liquidation within two days.
The resolution professional (RP) of the company had moved the tribunal seeking to liquidate NOCL following its lenders approve the same with 100% voting.
In its order, the bench said, “This notice shall be deemed to be a notice of discharge to the officers, employee and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator”.
As per the Insolvency and Bankruptcy Code (IBC), upon liquidation, all the powers of the board of directors, key managerial personnel and the partners of the corporate debtor ceases to exist and vested with the company liquidator. The liquidator shall manage the company.
Originally, Suzlur India, an operational creditor to the NOCL, filed a petition in the Madras High Court against the company, but after the enforcement of the IBC, the case was transferred to the NCLT which admitted its plea on July 25, 2017.
Expression of interests were invited by the RP on October 17, 2017 in which Bharat Petroleum (BPCL) and the UAE-based Citax Energy responded, but the CoC did not consider Citax’s bid for want of bank guarantee while BPCL’s bid was too low.
BPCL was given a chance to change the bid amount, but as there was not much change, the CoC on April 3, 2018, decided to invite a fresh round of EoI from the prospective bidders. In the second round, four bids were received. Apart from BPCL and Citax Energy, Haldia Petrochemicals and Gulf Petrochem joined in. While allowing Haldia Petrochem to improve its bid, the CoC rejected three other bids.
The CoC on April 19 rejected the resolution plan received from Haldia Petrochem as it offered the amount below the liquidation value. However, Haldia Petrochem, Gulf Petrochem and Citax Energy filed application with the NCLT which directed the RP to submit their plans before the CoC. The CoC found Citax ineligible, while it asked Haldia Petrochemicals and Gulf Petrochem to improve their bids.
“In the 14th meeting of CoC, held on July 24, after deliberations, the CoC members, in the case of Gulf Petrochem, were of the view that the NPV of the bid amount offered was far below the liquidation value, CoC was not in favour of the resolution plan submitted by Gulf Petrochem and with regard to the resolution plan of Haldia Petrochemicals, CoC noted that though the bid amount was `1,456 crore ie, just above the liquidation value, it contained several conditions precedent relating to payment that were leading to many uncertainties,” the order read.
Finally, on July 24, 2018, the CoC voted unanimously, with 100% vote, a resolution for liquidation.