Video-con Insolvency: Creditors to Take 96% Haircut on Dues

Creditors of debt ridden Video-con Industries will be taking nearly 96% haircut on their loans and the bidder is “paying almost nothing” for the company, NCLT has observed while approving Anil Agarwal’s Twin star Technologies’ Rs.2,962.02-crore bid under the insolvency resolution process.

Video-con Industries and its 12 group companies had a total admitted claims of Rs.64,838.63 crore. The Mumbai bench of the NCLT has also observed that the resolution plan is giving 99.28% to the operational creditors, which it sarcastically hinted to be as a “Hair cut or Tonsure, Total Shave”. It has requested the committee of creditors (COC) and Twin star Technologies to increase the payout to these operational creditors as they are getting only 0.72% of their admitted claim amount.

Many of operation creditors are also MSMES and in the near future many of these operational creditors may have to face insolvency proceeding, which may be inevitable, said NCLT in its order passed earlier on June 9. “Out of total claim amount of Rs.71,433.75 crore claims admitted are Rs.64,838.63 crore and the plan is approved for an amount of only Rs.2,962.02 crore, which is only 4.15% of the total outstanding claim amount and the total haircut to all the creditors is 95.85%,”the NCLT observed. It further said: “Therefore, the successful resolution applicant is paying almost nothing and 99.28% haircut is provided for operational creditors”.S-ET

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