NCLAT gives nod to Sarda Energy’s Rs 1,950 cr bid for SKS Power Generation | Company News
The National Company Law Appellate Tribunal (NCLAT) has given its nod to the National Company Law Tribunal’s (NCLT) approval of Sarda Energy & Minerals’ Rs 1,950 crore bid for SKS Power Generation.
Within a week of the NCLT approving its takeover of SKS Power Generation Ltd, Sarda Energy and Minerals deposited Rs 1,950 crore into an escrow account with Bank of Baroda (BoB), ahead of the 45-day deadline set by lenders. This included Rs 1,805 crore paid to lenders of SKS Power, State Bank of India and BoB, as well as expenses of the insolvency process.
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The appellate tribunal on Tuesday rejected appeals by three unsuccessful resolution applicants—Torrent Power, Jindal Power, and Vantage Point Asset Management—against the approval of Sarda Energy and Minerals’ resolution plan for the debt-ridden SKS Power Generation.
It stated that, according to the Supreme Court, there should be minimal interference in the commercial decision of the committee of creditors.
“In view of the foregoing discussions, and the law laid down by the Hon’ble Supreme Court regarding minimal interference in the commercial decision of CoC to approve the resolution plan, we do not find that any sufficient grounds have been made out within the meaning of Section 61(3)(ii) of the Insolvency and Bankruptcy Code (IBC) to interfere with the decision of the adjudicating authority (that is NCLT) approving the resolution plan of Sarda, in these appeals filed by unsuccessful resolution applicants,” Chairperson Justice Ashok Bhushan and Members (Technical) Barun Mitra and Arun Baroka said.
The NCLAT stated that, though Vantage gave the highest offer, the CoC is not obliged to approve its resolution plan. “The CoC, while approving the resolution plan in its commercial wisdom, takes into account a host of factors and the overall feasibility and viability of the resolution plan. The commercial wisdom of CoC, which did not approve a resolution plan that had the highest money, cannot be faulted,” the appellate tribunal said.
As a result, all the appeals were dismissed, it ruled.
Earlier on August 13, NCLT Mumbai, while approving Sarda Energy and Minerals’ (SEML) bid, had rejected applications, including those of Torrent Power, to acquire SKS Power Generation (Chhattisgarh).
Torrent Power had raised objections over the selection process, terming it discriminatory, and contended that it had proposed the highest upfront payment. The Torrent group firm also sought a copy of the approved plan, which was rejected by the NCLT.
The insolvency resolution process was started against SKS Power Generation in April 2022 over a plea by Bank of Baroda, which had total admitted claims of Rs 2,560 crore.
Along with Torrent Power, several other companies, including NTPC, Jindal Power, and Singapore-based Vantage Point Asset Management, were in the race. However, SEML’s resolution plan was voted for by the committee of creditors (CoC) in favour of SKS Power Generation.
First Published: Oct 01 2024 | 6:57 PM IST
