Operational creditors file application to stop Alok’s liquidation – The Economic Times–02.05.2018

A group of 10 operational creditors has filed an application objecting to the proposed liquidation of the debt-laden Alok Industries under insolvency proceedings intensifying the fight to save a company where a 18,000-strong workforce stand to lose their jobs.

The National Company Law Tribunal’s Ahmedabad chapter will hear the matter on Wednesday.

Some of those operational creditors that filed such interlocutory applications include little known companies like Mumbai-based Orient Allways, Vimal Trading, Kedia Fabtex that supplied goods or services to Alok Industries from time to time.

The application seeking interim relief sought that the tribunal “be pleased to direct the committee of creditors of the corporate debtor to approve the reliance resolution plan by requisite majority as required under the Code.” ET has reviewed the application. It also sought that “Pending final hearing and disposal of the present application,
the tribunal “not pass any order for liquidation of the corporate debtor.

Alok collectively owes about Rs 700 crore to 1,000 operational creditors.

Operational creditors said the company has been generating revenues. A sudden closure will have a disastrous effect on its large vendor base and their dependents. Alok has had a lion’s share of their order book and a lifeline to these small businesses.

More than a week ago, the resolution professional running Alok Industries referred the company for liquidation as lenders failed to resolve one of the big default cases.

The Reliance-JM Financial led consortium is said to have offered about Rs 5,050 crore as one-time payment to lenders while it planned to infuse about Rs 1,000 crore as working capital to resuscitate the company. The committee of creditors had to reject the plan as it obtained 70% vote share, 5% short of the mandated mark for now.

Last week, a welfare employee trust too made similar appeal seeking an urgent court relief.

Alok Employees Benefit and Welfare Trust filed an interlocutory application at the National Company Law Tribunal (NCLT) against the proposed shutting down of the company and have written to a group of dissenting creditors who voted against the resolution plan submitted by Reliance Industries earlier.

An interlocutory application is moved to seek urgent relief or to bring certain new facts to the knowledge of the court.

via Operational creditors file application to stop Alok’s liquidation – The Economic Times

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