An appeals tribunal has stayed a bankruptcy court's approval to the resolution plan of Dhanuka Laboratories Ltd for Orchid Pharma Ltd, further stretching the already long-drawn insolvency process of the debt-laden drugmaker.
The decision of the National Company Law Appellate Tribunal (NCLAT) came on a plea filed by a failed bidder against the National Company Law Tribunal's (NCLT) order last month to approve Dhanuka's offer to acquire Orchid.
In its petition, Accord Life Spec Pvt. Ltd argued that Dhanuka's approved offer of Rs 1,116 crore was lower than Orchid's liquidation value of Rs 1,309 crore.
However, the NCLAT noted that the resolution plan submitted by Accord Life was also less than the liquidation value.
The NCLAT issued notices to Orchid and Dhanuka seeking their responses, and allowed Accord Life to make State Bank of India a party to the case. It posted the case for hearing on August 28.
Chennai-based Orchid Pharma was among the 28 large corporate defaulters in the Reserve Bank of India’s second list of debt-laden companies that were referred for insolvency in August 2017. It owes a total of Rs 3,200 crore to a consortium of 24 banks.
In June, Dhanuka Laboratories had emerged as the highest bidder for Orchid. Its bid was approved by Orchid's lenders, even though Punjab National Bank (International) Ltd changed its vote just before e-voting on the resolution offer was to close. The Chennai bench of the NCLT later approved Dhanuka’s offer after getting favourable vote by Orchid's lenders.
This is the second round of bidding for Orchid. Last year, Ingen Capital had emerged as the winner of the race to acquire Orchid with a bid of Rs 1,490 crore. However, Ingen later failed to make the payment.
To assess the progress of the bankruptcy law, buyers' strategies and the emerging challenges, Mosaic Digital, the corporate banner behind VCCircle, is organising the third edition of its Stressed Assets Investment Summit on August 8 in Mumbai.