National Company Law Appellate Tribunal
Infrastructure Leasing & Financial ... vs Union Of India on 26 September, 2024
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
I.A. No. 5036 of 2023 & 3587, 6326 of 2024
IN
Comp. App. (AT) No. 346 of 2018
IN THE MATTER OF:
Union of India ....Appellant
Vs.
Infrastructure Leasing and Financial Services Ltd. & ...Respondents
Ors.
For Applicant: Mr. Abhijeet Sinha Sr. Advocate with Ms. Mahima
Sareen and Mr. Satyajit Bose, Advocates.
Mr. P. Nagesh Sr. Advocate with Mr. Angad Mehta,
Mr. Akshay Sharma and Mr. Arsh, Advocates for
Applicants in IA- 6326 of 2024.
For Respondents: Mr. Ramji Srinivasan Sr. Advocate with Mr. Raunak
Dhillon, Ms. Isha Malik, Mr. Nihaad Dewan, Mr.
Vikash Jha, Mr. Rakesh Chatterjee, Ms. Namrata
Sarogi, Ms. Angela Dua, Advocates for IL&FS.
Mr. Krishnendu Datta Sr. Advocate with Mr. Palash
Taing, Mr. Mayank Kumar, Ms. Alina Merin Mathew,
Advocates for MEPL.
Mr. Abhirup Dasgupta, Mr. Ishaan Duggal and Ms.
Ruchi Goyal, Advocates for Tata Power and
Pramerica.
ORDER
(26 th September, 2024) Ashok Bhushan, J.
These three applications have been filed praying for several reliefs as we shall notice hereinafter.
2
2. We have heard Shri Ramji Srinivasan, Learned Senior Counsel appearing for the IL&FS, Shri Abhijeet Sinha, Learned Senior Counsel for the ICICI Bank, Shri P. Nagesh, Learned Senior Counsel for Howen International Fund and Shri Krishnendu Datta, Learned Senior Counsel for the MEPL.
3. Brief background facts and sequence of the events necessary to be noticed for deciding these applications are:-
3.1. In Company Petition filed by the Union of India under Section 241 and 242 of the Companies Act, 2013, NCLT passed an order dated 01.10.2018 suspending the board of directors of IL&FS and vested its management in six nominated directors. In Company Appeal (AT) No.346 of 2018, this Tribunal passed an order on 15.10.2018 granting a stay on institution and continuation of suits or any legal proceedings against the IL&FS Group.
Various Affidavits and Reports were filed by Union of India in Company Appeal (AT) No.346 of 2018. By order dated 12.03.2020, this Tribunal approved the resolution framework proposed by the Union of India for resolution of IL&FS and its group companies. In these applications, we are concerned with IL&FS Engineering and Construction Company Limited (IECCL) which is a Category II Companies. The resolution framework as approved by this Tribunal contemplates categorisation of sale companies (i.e. IL&FS Group entities for which a binding bid is received) into:-
(a) a "Category I Company" (i.e., where the bidder is willing to assume all liabilities of the sale company whether operational or financial); or I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 3
(b) a "Category II Company" (i.e., where the financial bid amount offered by the bidder is less than all the liabilities of the sale company), based on the highest financial bid (H1 Bid) value received.
3.2. A public bid process was launched by IL&FS on 01.10.2020 by publishing an advertisement in leading newspapers inviting Expression of Interest (EoI) for the investment of IECCL. Due to unsatisfactory response to the public process, IL&FS on 13.01.2021 issued an invitation for EoIs i.e. sale of shares held by IL&FS and in IECCL for acquisition of 42.25% of issued, subscribed and paid up share capital of IECCL held by IL&FS and IFIN. EoIs received in pursuance of advertisement that was not accepted by IL&FS. IL&FS management approved the conducting a Swiss Challenge Process. A process note was issued in December 2021 inviting bid for the proposed acquisition for 42.25% of the issued, subscribed and paid up share capital of IECCL held collectively by IL&FS and IFIN. A consortium of applicant submitted a binding bid dated 07.01.2022 for the IECCL stake sale. The IL&FS board in its meeting dated 18.04.2022 approved the bid submitted by Almas Global Opportunity Fund SPC (Almas) consortium as the initial bid. New board approved a Swiss Challenge Process inviting a counter bid. Subsequent to counter bid process initiated by IL&FS, Almas consortium bid was declared as the highest bid for IECCL. Intimation dated 11.11.2021 issued H1 bid of Howen International Fund SPC. The Applicant in IA No.6342 of 2022 was placed before the CoC for voting, however, CoC with consist of lenders as ICICI Bank being the lead lenders requested for negotiation with H1 bidder. Several voting dates were fixed for voting on the I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 4 H1 bid which was extended from time to time. H1 bidder was also requested by the IL&FS to extend the bid validity from time to time. ICICI Bank who was filed IA No. 3587 of 2024 has raised various objection in the CoC meeting and IA No.31 of 2023 was filed by the ICICI Bank before the NCLT, Mumbai challenging the decision of the CoC to vote for the resolution of IECCL and certain other reliefs. After filing of IA No. 31 of 2023 by the ICICI Bank before the NCLT, IA No.5036 of 2023 has been filed by the IL&FS before this Tribunal. On 19.10.2023, this Tribunal where IL&FS has prayed to grant a relief as part of the IL&FS resolution framework for resolution of category II companies by permitting writing down of the entire share capital of such Category II companies upon payment of the bid value/proceeds without the requirement of obtaining any further approvals from the shareholders of such Category II Companies. H-1 Bidder had given his revised bid in July 2023 which was placed before the CoC for voting. By letter dated 03.04.2024 written by IL&FS to the H-1 Bidder, extension of validity of bid was sought till 30.06.2024. In IA No.5036 of 2023 where IL&FS has made prayers with regard to Category II Companies, this Tribunal vide order dated 19.03.2024 directed the IL&FS to upload a copy of the application on the website so as to invite objections by all concerned to the prayers made in the application. The H1 Bidder after coming to know about the application IA No.5036 of 2023 wrote to the IL&FS on 15.04.2024 expressing his concerned. Letter dated 15.04.2024 was written by IL&FS to H1 bidder informing that H1 bidder that the reliefs set out in IA No.5036 of 2023 shall not apply to the process being conducted by the IL&FS Group in I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 5 terms of the process note for sale of 42.25% subscribed and paid-up share capital in IECCL. An Affidavit dated 03.05.2024 was filed by the IL&FS in IA No.5036 of 2023 stating that IL&FS Group having already initiated the process for resolution of IECCL in the year 2021, thus, prayed that direction passed in IA No.5036 of 2023 shall not be applicable/be made applicable to the resolution of IECCL which is currently in its final and crucial stages. After the above Affidavit was filed on 03.05.2024 by the IL&FS, IA No.3587 of 2024 has been filed by the ICICI Bank Limited seeking a direction that IECCL be included in the purview of IA No.5036 of 2023 and certain other reliefs. It was further prayed that the voting on the final proposal submitted by Almas consortium be kept in abeyance till IA No.5036 of 2023 is finally decided by this Tribunal. The third application filed by Howen International Fund SPC came to be filed on 02.09.2024 being IA No.6326 of 2024 seeking direction to exclude the IECCL from the purview of IA No.5036 of 2023 with further direction that the voting on the Applicant's financial proposal is undertaken by the CoC of IECCL. All the three applications came to be heard together by this Tribunal on 17.09.2024. IA No.5036 of 2023 was filed in this Tribunal on 19.10.2023 in result of which other two applications being IA No.3587 of 2024 came to be filed on 13.05.2024 and IA No.6326 of 2024 came to be filed on 02.09.2024.
4. The issue between the parties in the present applications relate to IECCL. In the reply filed by the ICICI Bank who is lead lender of IECCL, details of shareholding and other details have been given. Details of IECCL I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 6 including its shareholding has been given in paragraph 5 of the reply of the ICICI Bank which is as follows:-
"5. IECCL is a flagship group company of the IL&FS group, engaged in development, construction and management of a wide range of infrastructure projects, such as roads, highways, dams and hydel power projects. The shareholding pattern for IECCL is as follows:
Entity Shareholding
Percentage
IL&FS 20.965
IL&FS Financial Services 21.29%
Ltd. ("IFIN")
SBG Projects Investments 27.87%
Ltd. ("SBG")
Public Shareholders 29.88%
Thus, the IL&FS group holds 42.25% of the share capital of IECCL. The remaining shareholding i.e., 57.75%, is distributed between SBG Projects Investments Ltd. and other public investors."
5. The shareholding of IL&FS and IFIN is 42.25% which is an admitted fact. As per the Resolution Framework approved by this Tribunal vide order dated 12.03.2020, IL&FS issued an invitation for Expression of Interest on 13.01.2021. It is useful to extract the Invitation for Expression of Interest dated 13.01.2021 which is as follows:-
IL&FS Invitation for Expression of Interest Sale of Shares held by Infrastructure Leasing & Financial I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 7 Services Limited ("IL&FS") and IL&FS Financial Services Limited ("IFIN") in IL&FS Engineering and Construction Company Limited ("IECCL") In furtherance of the advertisements dated October 01, 2020 issued by IL&FS in The Economic Times, The Maharashtra Times and The Nava Telangana ("Initial Advertisements"), expressions of interest ("EOI") are invited for acquisition of 42.25% of the issued, subscribed and paid up share-capital of IECCL held by IL&FS and IFIN ("Proposed Transaction").
IECCL has more than three decades of experience in the engineering and construction business with capabilities in providing integrated Engineering, Procurement and Construction (EPC) services. IECCL is primarily executing infrastructure projects across India and has been delivering projects in the sectors of Power, Oil and Gas, Roads, Railways and Metros, Water and Irrigation, and Buildings & Structures.
Interested parties may refer to www.ilfsindia.com/ad/ for details and eligible entities should submit the EOI latest by 5 PM Indian Standard Time on January 28, 2021. Interested parties that have already submitted EOls subsequent to the Initial Advertisements can continue to participate in the process initiated hereunder relying on the documents submitted by them previously by submitting a confirmation as set out in the EOI uploaded on www.ilfsindia.com/ad/pursuant to this advertisement.
IL&FS reserves the right to suspend, modify or terminate the Proposed Transaction and the process at any time without providing any reasons or incurring any liability to any party.
January 13, 2021 I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 8
6. Terms of bid for acquiring IECCL were issued by the IL&FS in December, 2021. A consortium of the Applicant- Howen International Fund SPC has submitted its bid for 42.25% share capital of IECCL held by IL&FS and IFIN. There were certain changes in the consortium members. The consortium led by Howen International Fund SPC was declared H1 after inviting counter bid by Swiss Challenge Method. Intimation dated 11.11.2022 was issued to Howen International Fund SPC after declaring Howen International Fund SPC as H-1 bidder. The Howen International Fund SPC was called for negotiation by the CoC members including the ICICI Bank and revised financial proposal was submitted by Howen International Fund SPC on 21.07.2023. Consequent to the negotiation with the CoC and with the ICICI Bank as a lead member, revised financial proposal which was sent on 21.07.2023 has revised to its original proposal of cumulative bid value of Rs. 527.31 Crores to Rs.799.19 Crores. Certain more clauses were included in the revised financial proposal. The ICICI Bank has raised certain objections in the CoC minutes with respect to resolution of IECCL as undertaken by the IL&FS. In the CoC meetings, ICICI Bank raised objections stating that the bid value provided by the consortium is lower than the liquidation value. In the reply to the above application, the ICICI Bank has given the details of liquidation value of IECCL in paragraph 8 of the reply. Paragraph 8 of the reply is as follows:-
"8. The New Board also appointed two agencies- Adroit Valuation ("Adroit") and RNC Valuecon LLP ("RNC")- to conduct valuation of IECCL, which was determined as follows (in crore):-
I.A. No. 5036 of 2023 & 3587, 6326 of 2024
IN
Comp. App. (AT) No. 346 of 2018
9
Valuer Fair Market Liquidation Liquidation
Value (as on Value (as on Value (as on 30
30 September 15 October September
2020) 2018) 2020)
Adroit 1231.6 529.8 674.6
RNC 2166.2 1436.99 1460.1
Average 1698.9 983.395 1067.35
As per the valuation commissioned by the New Board, the average liquidation value of IECCL as on 15 October 2018 was INR 983.395 Crore."
7. As noted above, the ICICI Bank had filed an application IA No.31 of 2023 before the NCLT praying for various reliefs which application, however, was subsequently withdrawn after filing of IA No.5036 of 2023 by the IL&FS.
8. Before proceeding further, we need to notice the prayers made in the IA No.5036 of 2023 which are as follows:-
"a) grant a relief as part of the IL&FS Resolution Framework for resolution of Category II Companies by permitting writing down of the entire share capital of such Category II Companies upon payment of the bid value/proceeds without the requirement of obtaining any further approvals from the shareholders of such Category II Companies, resulting in the final resolution of the said entities; and
b) pass such other order(s) as this Hon'ble Appellate Tribunal may deem fit and proper in the facts and circumstances of the case."
9. As noted above, an Affidavit has been filed by the IL&FS on 03.05.2024 in IA No. 5036 of 2023 bringing certain additional facts/ I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 10 developments. Affidavit giving the details of process which took place with regard to IECCL under the heading resolution of IECCL. It is useful to notice a details given by IL&FS with regard to resolution of IECCL in paragraphs (x) to (xvi), which reads as follows:-
"Resolution of IECCL
(x) In the aforementioned backdrop, it is stated that whilst the captioned Application has been filed permitting the New Board to resolve Category II Companies by writing down 100% of their share capital as stated hereinabove, the present affidavit is being filed to place on record certain clarification(s) that IL&FS deems necessary, including placing on records necessary facts with respect to resolution of a particular Category II Company (whereby shareholding of IL&FS Group in the said entity is less than 100%), being IL&FS Engineering and Construction Company Limited ("IECCL").
(xi) The IL&FS Group has initiated a Swiss challenge process for the sale of 42.25% of the issued, subscribed and paid up share capital of IECCL held by IL&FS Financial Services Limited ("IFIN") and IL&FS. The remaining shareholders in IECCL, a listed company, are SBG Private Investments Limited ("SBG"), which holds 27.87% of the issued, subscribed and paid up share capital of IECCL and public shareholders who collectively hold the remaining 29.88%.
(xii) In furtherance of the same, the Swiss Challenge Process letter dated December 23, 2021 ("Process Note") was issued to the unincorporated consortium comprised, I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 11 inter alia, of Howen International Fund SPC (formerly known as Almas Global Opportunity Fund SPC) ("Almas") and Markolines Pavement Technologies Limited ("Markolines") (Markolines together with the Almas forms "Consortium") initiating the process in accordance with the terms of the Process Note for the sale of the 42.25% of the issued, subscribed and paid up share capital of IECCL held collectively by IL&FS and IFIN. Pertinently, the said Process Note is as per the current Resolution Framework i.e. it does not contemplate write down of 100% share capital of IECCL in exchange for the bid value received.
(xiii) Accordingly, a binding bid dated January 7, 2022 read with the email dated April 6, 2022 was submitted by the Consortium ("Bid") for acquiring 42.25% of the issued, subscribed and paid up share capital of IECCL held collectively by IL&FS and IFIN, which was placed before the committee of creditors of IECCL in November 2022 for their approval. Pursuant to negotiations and discussions between the Consortium and committee of creditors of IECCL, the bid was later revised vide letter dated July 21, 2023 issued by Almas on behalf of the Consortium Financial Proposal was placed before the committee of creditors of IECCL for their consideration, and is currently pending approval.
(xiv) In the meantime, several proceedings were initiated by the lenders/ stakeholders of IECCL before the Hon'ble NCLT/ this Hon'ble Appellate Tribunal challenging inter alia consideration of the said Revised Financial Proposal, which further delayed resolution of IECCL.
I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 12
(xv) On account of the committee of creditors being in the process of considering the Revised Financial Proposal, IL&FS issued a letter dated April 3, 2024 for extension of the validity of the Revised Financial Proposal, which was countersigned by Almas. Thereafter, the validity of the Revised Financial Proposal was extended by Almas, on behalf of Consortium vide letter dated April 8, 2024, till June 30, 2024.
(xvi) In view of the fact that,
(a) the resolution process for IECCL is now at an advanced stage, with the approval from the Committee of Creditors of IECCL for the Revised Financial Proposal being forthcoming; and
(b) the Revised Financial Proposal received from the Consortium was submitted in terms of the Process Note which contemplates IECCL continuing to being a listed company post resolution of IL&FS' stake and accordingly does not contemplate write down of 100% share capital of IECCL and any material change in the terms of the Process Note at this stage, subject however to and basis this Hon'ble Appellate Tribunal having granted the relief/direction sought under the captioned Application (I.A 5036 of 2023), will not only vitiate the process run till date under the Process Note, but may also result in the Consortium withdrawing its bid, it is clarified further that the direction being sought in the captioned Application, was neither sought for, nor intended to address the resolution of IECCL under the I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 13 process undertaken pursuant to and in terms of the Process Note and if the prayed directions are granted, the same shall accordingly not be applicable/be made applicable to the resolution of IECCL which is currently in its final and crucial stages. This is to ensure that the resolution of IECCL as currently being undertaken, gets concluded under and in terms of the Process Note without any further delays; a resolution that will eventually result in IL&FS receiving a bid value of approximately Rs. 397 crores, which in turn will result in debt resolution of approximately Rs. 4,000 crores."
10. Shri Ramji Srinivasan, Learned Senior Counsel for the Applicant contended that IA No.5036 of 2023 is still pending and much before filing the application, the Resolution Process of IECCL has proceeded and is on the final stage. Voting on the bid received from Howen International Fund SPC is in process which bid last date for voting is 30.09.2024. Submission is that in view of the fact that the process of IECCL has gone very far where completion which process started in the year 2021 with clear stipulation that the shares held by the IL&FS Group i.e. 42.25% was to be sold in the IECCL. The larger prayer in IA No.5036 of 2023 for writing down 100% shareholding of Category II companies without being applied on IECCL. It is submitted that all the stakeholders including the lenders and bidders are well aware that the process has been initiated for only for 42.25% shares held by IL&FS and IFIN in the IECCL, hence, no objection can be raised by the lenders at this stage. It is submitted that thus IECCL be excluded from the prayers made in IA No.5036 of 2023 for which Affidavit has already been filed by the IL&FS on 03.05.2024. It is submitted that the ICICI Bank which I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 14 is member of the CoC have been well aware of all process and has been participating in negotiation with H-1 bidder and objection raised by the ICICI Bank at this stage need not be entertained and application IA No. 5036 of 2023 deserves to be rejected.
11. Shri Abhijeet Sinha, Learned Senior Counsel appearing for the ICICI Bank submits that by sale of 42.25% shares held by IL&FS and IFIN in the IECCL cannot be treated to be resolution of the debt. The aggregate debt exposure of lenders in IECCL is Rs.13,053.9 Crores. The ICICI Bank had objected to voting on H1 bid in the CoC meeting and for that purpose has filed IA No.31 of 2023 before the NCLT and the IL&FS itself prompting on the application filed by the ICICI Bank has filed IA No.5036 of 2023 itself proposing that there should be 100% write down of shares of all Category II Companies. It is submitted that when IL&FS itself has made this prayer of 100% write down of the shares in Category II Companies, its prayer to exclude IECCL cannot be entertained. IL&FS cannot be allowed to take contradictory stand, on the one hand, praying that 100% write down of shares of Category II Companies be taken and on the other hand, seeks to exclude the IECCL from IA No.5036 of 2023.
12. Shri P. Nagesh, Learned Senior Counsel for the Howen International Fund SPC submits that Howen International Fund SPC has submitted its bid with regard to share of 42.25% and the IECCL being listed company, the offer given by Howen International Fund SPC is on the ground that IECCL is listed company and in event of 100% write down of shares, the offer of I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 15 Howen International Fund SPC may not stand any further. It is submitted that the process for sale of 42.25% shares held by IL&FS Group is proceeding for last four years and no stage there was any representation by the IL&FS Group that there shall be write down of 100% shares at this stage. When Howen International Fund SPC has given its offer and kept its bid alive for last more than two years blocking its amount, it is not open for the ICICI Bank to raise any objection to the process. It is submitted that the ICICI Bank itself has been negotiating with Howen International Fund SPC, the H1 Bidder and it was on the basis of negotiation and request by the CoC, the Howen International Fund SPC has now revised its offer to Rs.800 Crores.
13. Shri Krishnendu Datta, Learned Senior Counsel appearing for an objector who has filed objection in IA No.5036 of 2023 in pursuance of the order dated 19.03.2024 passed by this Tribunal submits that he has also filed objection with regard to prayers made in IA No. 5036 of 2023. It is submitted that he has objection with regard to write down of 100% share capital of Howen International Fund SPC. He submits that he may be given opportunity to place his objection which has been filed in IA No.5036 of 2023 and prayers in IA No.5036 of 2023 be not considered as on date.
14. We have considered the submissions of the parties and perused the record.
15. As noted above, the prayers in IA No.5036 of 2023 are to permit the IL&FS to write down 100% shares of Category II Companies upon payment I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 16 of the bid value/proceeds without the requirement of obtaining any further approvals from the shareholders of such Category II Companies. From the facts and sequences of the events as noticed above, it is clear that for the resolution of IECCL, steps were taken by the IL&FS from January 2021 for issuing an invitation for Expression of Interest dated 13.01.2021 which we have already extracted above. The invitation for Expression of Interest clearly mentions that Expression of Interest are invited for acquisition of 42.25% of the issued, subscribed and paid up share capital of IECCL held by IL&FS and IFIN. The process in pursuance of the above invitation for expression is proceeding as on date. The ICICI Bank being lead lender of the IECCL has also participating in the process including the meetings of the CoC of the IECCL held from time to time. We have already noticed the Affidavit of IL&FS dated 03.05.2024 where IL&FS has given its reasons for not including the IECCL in the prayers made in IA No.5036 of 2023. The submission of the IL&FS is that the process of IECCL has gone too far and which is going for last three years be allowed to be completed and voting which has already been commenced and last date of which voting is 30.09.2024. We do not interdict at the instance of ICICI Bank.
16. Coming to the application of Howen International Fund SPC, we are of the view that the offer which has been given by Howen International Fund SPC in pursuance of invitation for Expression of Interest are the issues which have to be considered by the CoC and it is not necessary for this Court to express any opinion on the merits of the offer given by Howen International Fund SPC. The submission, however, advanced by Shri P. I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 17 Nagesh that voting by the CoC on the bid submitted by Howen International Fund SPC need not be interdicted at the instance of the ICICI Bank needs submission. From the facts brought on the record, it does appear that the ICICI Bank as a lead lender has participated in the negotiation process with the H1 Bidder and in pursuance of negotiation revised offer given by Howen International Fund SPC which has been revised to Rs.800 Crores as compared to the initial offer of Rs.527.31 Crores. Copy of the letter dated 07.07.2024 sent by Howen International Fund SPC has also been brought on the record in IA No.6326 of 2024 where Fourth Revised Bid in snapshot has been captured in paragraph 17, which is as follows:-
"Fourth Revised Bid, in snapshot
17. To summarise the aforesaid, the terms of our Fourth Revised Financial Bid, are as follows, in which we expect no further revisions.
S. No. Particulars Amount (in
Rs. Crore)
A. Cash component to be paid upfront (totaling
currently Rs. 444 Crores and minimum Rs. 400
Crores) and minimum distribution to Lenders of Rs. 295 crores excluding payment towards New BGs i. Lump Sum Consideration to be used for 295 distribution against crystalised outstanding liabilities existing as on the cut-off date ii. Upfront payment for Invoked New BGs 102 iii. Taking over liability and obligation for 130 the New BGs not invoked iv. Less: BGs released subsequent to the 83 submission of original bid vi. Net Cash component to be paid 444 upfront ((i) + (ii) + (iii) (iv) B. Cash and other components (totalling Rs.363 I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 18 Crores vii. Add: BG protection offered 300 viii. Share in Arbitration Award 36 ix. Conversion of part debt into equity* 27 x. Net Cash and other component to be 363 paid eventually ((vii) +(viii) + (ix)) xi. Total Bid value (as against the previous 807 Bid Value of Rs.527.31 Crores ((vi) +(x)) *The amount of Rs. 27 Crores represents the conversion value (of debt into equity) as long as the entire Rs. 400 crores are used for the Preferential Issue of shares. Number of shares issued would vary depending on the issue price."
17. As observed above, where the revised bid submitted by Howen International Fund SPC requires consideration is not for this Tribunal to assess and it is for the CoC to take a call. Letter sent by Howen International Fund SPC dated 07.07.2024 has extended its validity of fresh EMD till 31.09.2024.
18. The apprehension which is expressed by the Counsel for the ICICI Bank is that the entire debt of lenders may be extinguished on resolution of IECCL and in event 100% write down of shares of IECCL may be undertaken, it may fresh more amount to satisfy the debt of lenders. In IA No.3587 of 2024, prayers made by the ICICI Bank are to the following effect:-
"a. Direct IL&FS to include IECCL within the list of entities that fall within the ambit and purview of the IL&FS Application, being I.A. No. 5036 of 2023 in CA(AT) No. 346 of 2018;
I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 19 b. Direct that if any relief is granted in the IL&FS Application, being I.A. No. 5036 of 2023, IL&FS will appropriately modify the resolution process for IECCL, including inviting fresh expressions of interest;
c. Direct that in the interim, keep the voting on the financial proposal submitted by the Almas Consortium in abeyance until the present Application and the IL&FS Application, being I.A. No. 5036 of 2023, is finally decided by this Hon'ble Court; and d. pass such orders as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case."
19. In the reply to IA No. 5036 of 2023 which was filed by the ICICI Bank, the ICICI Bank in paragraph 23 has pleaded following:-
"23. In the event however, this Hon'ble Tribunal was not inclined to grant the reliefs sought in the present Application, in that case, keeping in mind the legal objections raised by the IECCL Lenders' Consortium before the Ld. NCLT, this Hon'ble Tribunal be pleased to clarify that the IECCL Lenders Consortium shall be at liberty to press for its objections on extinguishment of its entire debt for mere payment for 42.25% shareholding of IECCL in the ongoing resolution process."
20. What is pleaded by the ICICI Bank in the above paragraph 23 is a reasonable plea which needs acceptance. In event, the process of sale of I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 20 42.25% shareholding of IECCL is on-going resolution process is completed, the said shall not preclude the lenders including the ICICI Bank to raise objection on extinguishment of its entire debt. We thus, grant liberty to the ICICI Bank to raise its objection on extinguishment of its entire debt for mere payment for 42.25% shareholding of IECCL. As noted above, in IA No.5036 of 2023, there are other objections filed by the objectors in view of the liberty granted by this Tribunal vide its order dated 19.03.2016 who are opposing the prayer of 100% write down of shares of Category II entities which objection need to be considered before we finally decided the IA No.5036 of 2023. Thus, other objector has also to be heard while finally decided the IA No.5036 of 2023. Thus, as on date, IA No. 5036 of 2023 is not being decided, however, we accept the prayers made by the IL&FS as contained in the Affidavit dated 03.05.2024 that resolution of IECCL which has commenced from 13.01.2021 much before filing of IA No.5036 of 2023 be kept out of prayers made in IA No.5036 of 2023.
21. In view of the above, we pass following orders in these three applications:-
(i) List IA No.5036 of 2023 on 14.10.2024 for hearing and all the objections on the application including the objection filed by the ICICI Bank.
(ii) It is clarified that the resolution of IECCL which commenced from 13.01.2021 need to be completed irrespective of pendency of IA No.5036 of 2023 and it is clarified that the prayers made in IA No.5036 of 2023, IECCL shall be treated to be excluded.
I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018 21
22. We further clarify that the ICICI led lenders consortium shall be at liberty to press for its objection on the extinguishment of its entire debt for mere payment for 42.25% shareholding of IECCL in the ongoing resolution process. IA No. 3587 of 2024 and IA No.6326 of 2024 are disposed of accordingly.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) New Delhi Anjali I.A. No. 5036 of 2023 & 3587, 6326 of 2024 IN Comp. App. (AT) No. 346 of 2018