The company has deposited close to ₹110 crore with lenders to show its commitment to pay loans, the people said. Kolkata-based HNG was admitted for insolvency proceedings at the behest of DBS Bank in October last year. HNG did not respond to ET’s mailed query.
The promoter, Mukul
, made the settlement offer under Section 12A of the Insolvency and Bankruptcy Code (IBC). This provision gives tribunals the power to withdraw an application from insolvency proceedings if 90% of lenders by value agree.
The promoters have tied up with group for funding the settlement, which involves their contribution of about ₹400 crore and funding of ₹1,000 crore. Edelweiss Asset Reconstruction Company (ARC), which acquired loans from , and HSBC in the past, has a 23% share in HNG’s debt.
, which has the highest exposure of 38%, strongly supports the 12A scheme. A draft report on the transaction audit, done by BDO India, does not give a clean chit to the company,” said a third person aware of the matter.
In 2019, the promoters offered ₹1,710 crore by way of a one-time settlement; last June, it gave a revised settlement offer of ₹1,400 crore. Both proposals failed, following which the National Company Law Tribunal (NCLT) admitted the company for resolution of the outstanding debt. The promoter could not comply with the payment timeline in 2019, while last year, talks with lenders collapsed after some banks wanted a higher payout.
Resolution professional Girish Juneja, backed by EY, has admitted ₹3,338 crore in claims from financial creditors. The promoter’s offer of ₹1,380 crore will equate to a recovery of 41%. If 10% equity and another ₹550 crore that lenders appropriated in the last two years are added to the settlement offer, lenders’ recovery is about 60%.
Last month, the Supreme Court’s ruling to permit loan settlement by Sivashankaran for Siva Industries has encouraged promoters to regain control of their companies by making applications under suitable provisions of the law. Siva Industries too, settled the case under 12A of IBC.
HNG received expressions of interest from
Chemicals, Danish beer maker Carlsberg, and AGI Greenpac, formerly known as , a maker of sanitaryware products. Kotak Special Situation Fund and two private equity funds – Oaktree Capital and Cerberus – also submitted expressions of interest. Juneja has invited firm offers by July 23.