Orissa Minerals Development Company (OMDC), a subsidiary of state-owned Rashtriya Ispat Nigam Ltd, has been able to settle dues of creditors.

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The company has now come out from National Company Law Tribunal (NCLT) even after the initiation of bankruptcy proceedings process under the Insolvency and Bankruptcy Code, making it one of the first such cases allowed through an amendment to the regulations introduced in June this year.

OMDC, which owns several iron ore blocks but doesn’t have existing mining rights, was earlier dragged to the Kolkata-bench of NCLT by its creditors.

The court accepted the bankruptcy case and even appointed a resolution professional to execute the process which would have resulted in either change in ownership or liquidation.

The management then approached the National Company Law Appellate Tribunal (NCLAT), which in May suggested “amicable settlement of the claimants”.

OMDC then entered into negotiations with operational creditors and over June-July settled Orissa Stevedores’s Rs 13.07 crore dues by paying Rs 11 crore. Dues of Rs 21 crore to another individual creditor were settled at Rs 15 crore.

This was communicated to the Committee of Creditors which met in July and decided to allow application for withdrawal under the new provisions of Section 12A.

The application was made before NCLAT, which on September 7 directed dismissal and withdrawal of the insolvency case against OMDC.

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“This is a welcome development and first such case, at least before the Kolkata-bench of NCLT under Section 12A. The decision by the Committee of Creditors had received 90% of the vote in its meeting as required by the provisions. Also, no expression of interest was floated by that time,” Bijay Murmuria, resolution professional appointed for OMDC, told DNA Money.

Source: DNA Money