Sterling Biotech: NCLT reserves order on bankruptcy withdrawal as Madison Pacific Trust challenges bankers' plea

The NCLT asked the RP to explain on why he did not approach the bench after the proposal was rejected with 89 percent vote at the first meeting of the committee of creditors led by Andhra Bank.

Press Trust of India May 02, 2019 20:00:29 IST
Sterling Biotech: NCLT reserves order on bankruptcy withdrawal as Madison Pacific Trust challenges bankers' plea
  • The banks approved a one-time settlement offer from the Sandesaras of around Rs 3,945 crore

  • Madison Pacific Trust said NCLT cannot allow withdrawal of the bankruptcy application under maintainability issue

  • Sterling group owes over Rs 15,600 crore to its financial and operational creditors

Mumbai: The National Company Law Tribunal (NCLT) on Thursday reserved its judgement on a bankers' plea to withdraw the bankruptcy proceedings against Sterling Biotech and go for a one-time settlement with the absconding promoters.

Sterling Biotech NCLT reserves order on bankruptcy withdrawal as Madison Pacific Trust challenges bankers plea

File photo of Nitin Sandesara, promoter of Sterling Biotech. News18

The tribunal asked the resolution professional (RP) to explain on why he did not approach the bench after the proposal was rejected with 89 percent vote at the first meeting of the committee of creditors led by Andhra Bank.

The banks have approved a one-time settlement offer from the Sandesaras of around Rs 3,945 crore out of the Rs 7,500 crore they owe to the lenders.

To this the RP informed the tribunal that the decision was taken to as bankruptcy proceedings had crossed the mandated days and that he merely acted as facilitator on the instruction of the lenders who chose to go for another voting.

Meanwhile, Madison Pacific Trust challenged the withdrawal of bankruptcy proceedings initiated by banks saying it held over 10 percent voting rights in the committee of creditors and their consent was not sought by the RP at the time of voting.

They further said the tribunal cannot allow withdrawal of the bankruptcy application under maintainability issue. Sterling Biotech owes Rs 1,800 crore to the bond holders of Madison Pacific Trust.

The Sterling group owes over Rs 15,600 crore to its financial and operational creditors. While the flagship Sterling Biotech owes over Rs 7,500 crore to lenders, sister concern Sterling SEZ owes over Rs 8,100 crore.

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