Financially stressed Williamson Magor group, promoted by the Khaitan family, got a major relief on Friday as the Kolkata bench of the National Company Law Tribunal (NCLT) allowed a financial creditor to withdraw its insolvency petition against the group’s engineering entity. The relief against McNally Bharat Engineering Company (MBE) came even after the petition was admitted two days ago, two persons familiar with the development told sources. The withdrawal of petition follows an out-of-tribunal bilateral settlement.
Earlier, in a big jolt to the ongoing restructuring efforts for the Williamson Magor group, the tribunal on Wednesday had ordered commencement of the insolvency resolution process for MBE on a plea of the financial creditor Trinetra Electronics for a payment default.
Ratnanko Banerjee, one of the counsels for Trinetra Electronics, said, “The bench disposed of our insolvency petition today after we withdrew the petition when the two sides settled the matter out of the insolvency tribunal. So, now the insolvency resolution process for the company will not start.”
Trinetra Electronics had filed the insolvency application against MBE for a total default (principal sum and interest) of around Rs 3.36 crore as on September 30, 2014. Although MBE’s chairman Aditya Khaitan was not available for a comment, a source from the Williamson Magor group confirmed the latest development.
“The matter has been settled with Trinetra Electronics out of court. It was a small amount,” the source said.
Another person from the group said, “We are in the process of signing an ICA (inter-creditor agreement) with lenders. Lenders, except only two or three, have agreed in-principle to sign the ICA.” Apart from Trinetra, a few financial creditors, including Tata Capital Financial Services, and some operational creditors had also filed insolvency petitions against MBE. NCLT Kolkata bench is currently hearing these matters.