Under the Insolvency and Bankruptcy Code (IBC), The National Company Law Tribunal (NCLT) on Monday approved Gurgaon-based Dhanuka Laboratories’ resolution plan of Rs 1,116 crore to take over the financially troubled pharmaceutical company, Orchid Pharma.
The Chennai bench of NCLT held the view that a majority of the financial creditors had approved the bid by Dhanuka overruling an objection filed by Accord Life Spec.
As per the terms set, the lenders will get about Rs 1,116 crore including Rs 570 crore quoted by Dhanuka Lab. A consortium of 24 banks has lent a total of over Rs 3,200 crore to the drug maker and the lenders will be taking a haircut of around 65%.
According to the terms set, the loan specialists will get about Rs 1,116 crore including Rs 570 crore cited by Dhanuka Lab. An association of 24 banks has loaned a sum of over Rs 3,200 crore to the drug maker and the moneylenders will trim down around 65%.
Likewise Dhanuka, Accord Life Spec and Covalent Laboratories were the other two other companies which had bid for Orchid Pharma.
Earlier this month, Accord Life Spec had asked the court to consider its bid after Punjab National Bank subsidiary, PNB International Ltd (PIL), withdrew its consent to the resolution plan, leading to votes in favour of the plan falling below the 66% required.
Commenting on the court’s approval, Shiju P Veetil, senior partner, India Law said, “The court has approved this plan and now Accord challenging in the NCLAT does not look like a possibility. This resolution is a classic case of effectiveness of IBC. The whole process had gone haywire when Ingen Capital backtracked last year, but creative intervention of NCLT ensured success of the resolution process.”
Orchid Pharma is among the 28 large corporate defaulters in the Reserve Bank of India’s second list of debt-laden companies that were referred to the NCLT. It was admitted in the Chennai bench of the NCLT in August 2017.