NCLT approves resolution plan for KVIR Towers under pre-packaged insolvency
This story was originally published at 15:20 IST on 1 January 2025
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NEW DELHI – The Delhi bench of the National Company Law Tribunal has approved the resolution plan for KVIR Towers Pvt. Ltd. under the pre-packaged insolvency resolution process. KVIR Towers had offered INR 4.45 billion for its resolution process.
"The resolution plan is binding on the corporate debtor and other stakeholders involved so that the revival of the debtor company shall come into force with immediate effect," the tribunal said. The moratorium imposed on KVIR Towers under section 14 of the Insolvency and Bankruptcy Code, 2016, will cease to be effective.
In 2021, the government introduced a pre-packaged insolvency resolution process to provide a quicker and cost-effective alternative insolvency resolution framework for the revival of micro, small and medium enterprises. Section 54A of the Insolvency and Bankruptcy Code, 2016, outlines the eligibility criteria for corporate debtors to initiate pre-packaged insolvency processes. One of the eligibility criteria states that the corporate debtor must be eligible to submit a resolution plan under the 2016 Code.
In February, the tribunal had admitted a petition by KVIR Towers to start pre-packaged insolvency proceedings against the company. KVIR Towers reasoned the cause of default to be the COVID-19 pandemic, non-sale of inventory, poor collection for more than two years and other factors. The plan states that INR 2.03 billion will be paid to operational creditors, INR 2.31 billion to assenting financial creditors, and 108.1 million to other creditors. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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