The National Company Law Tribunal on Thursday approved a proposal by paper manufacturer JK Paper Ltd to take over the bankrupt The Sirpur Paper Mills Ltd.
The approval by the NCLT's Hyderabad bench came in a record time of 50 days since insolvency proceedings for Sirpur Paper Mills began, according to a statement by law firm Shardul Amarchand Mangaldas & Co, which had advised JK Paper.
JK Paper had submitted its resolution plan of about Rs 600 crore for Sirpur before the NCLT on 29 May 2018. It approached the NCLT after Sirpur's financial creditors approved the plan on 16 May by a majority 80.66% of the voting share.
Shardul Amarchand Mangaldas advised JK Paper on all aspects of the insolvency resolution process including on the drafting of the resolution plan, competition law and representation before the NCLT, the statement said.
Sirpur Paper Mills, founded in 1938, has a pulp and paper mill at Kaghaznagar in Adilabad district of Telangana.
JK Paper is one of India’s largest producers of office, printing, writing and specialty paper, and packaging boards.
Last year, International Finance Corporation (IFC), the private-sector investment arm of the World Bank, said it would invest up to $50 million (Rs 335 crore then) in JK Paper.
In 2016, JK Paper, which is run by Harsh Pati Singhania, had offered to buy Ballarpur Industries Ltd’s plants located at Chandrapur and Gadchiroli districts of Maharashtra. Ballarpur and JK Paper are among paper manufacturers that have attracted private equity investors in the past.
Earlier this year, Kotak Private Equity, the alternative asset investment arm of private-sector lender Kotak Mahindra Bank, picked up a stake in Kolkata-based Orient Paper & Industries Ltd for about Rs 10 crore ($1.56 million then).
Shares of Sirpur Paper gained 4.93% to Rs 10.64 on the BSE on Thursday while those of JK Paper fell 4.47% to Rs 99.35. The benchmark Sensex was flat.