The last-minute change of stand by one of the lenders, Punjab National Bank (International) (PNBIL), from favour to dissent, with regard to the bid by Dhanuka Laboratories, has thrown the sealing of Orchid Pharma’s resolution plan into suspense.
Though PNBIL, along with other lenders in the committee of the creditors (CoC) had voted in favour of the resolution plan of Dhanuka Laboratories initially, the bank reportedly changed its stand afterwards and sent out an e-mail for a change in its e-voting for the same, to dissent. The e-voting was kept open from June 7 to June 11.
While the resolution was voted by the CoC with a 67.07% voting share, with the change being considered, the voting share for the resolution plan has come down to 65.53% — against the required percentage of 66%. PNBIL has an exposure of `54 crore in the beleaguered company.
However, Orchid Pharma in a regulatory filing said that based on the legal advice received, the resolution professional will file the resolution plan of Dhanuka Laboratories before the Chennai NCLT, seeking guidance with respect to accepting the change in stand taken by Punjab National Bank as well as on the treatment of the voting percentage. There were three companies in the race including Gurgaon-based Dhanuka Laboratories, Chennai-based Accord Life Spec and Hyderabad-based Covalent Laboratories to take over the debt-ridden Orchid Pharma.
Dhanuka Lab is a manufacturer and exporter of oral cephalosporin APIs, while Covalent also specialises in manufacturing cephalosporins. Accord Life Spec, part of Accord Group, has diversified interests in medical education, technical universities, hospitals, breweries and hotels. This was Orchid’s second attempt to find a resolution plan under the CIRP, as the previous resolution plan by US-based Ingen Capital was annulled by the NCLT after the firm failed to remit the upfront payment as per the norms.
Sources said that despite the renewed interest and the participation of the three companies in the final round, the highest bid this time would see a larger haircut compared to the `1,490-crore offer submitted by the previous bidder Ingen Capital. Orchid owes `3,200 crore to a consortium of 24 banks.
Source: June 13, 2019, Financial Express