Approval of Scheme of Compromise and Arrangement for Metallurgical Coke Producer

The Tribunal approved the application for the sanction of a scheme of compromise and arrangement under sections 230 to 232 of the Companies Act, 2013. The scheme involved secured/unsecured creditors, FCCB holders, and shareholders of a company in liquidation, a major metallurgical coke producer facing financial crisis. Despite unsuccessful debt restructuring attempts and a liquidation order, the company's journey through insolvency proceedings culminated in the approval for convening meetings of stakeholders to consider and approve a new scheme. The Tribunal emphasized compliance with the order and provided for the supply of urgent certified copies upon request.

---

---

Issues:
Application for sanction of scheme of compromise and arrangement under Companies Act, 2013.

Analysis:
1. The applicant filed an application under sections 230 to 232 of the Companies Act, 2013 seeking approval for a scheme of compromise and arrangement involving secured/unsecured creditors, FCCB holders, and shareholders of a company in liquidation.
2. The company, a major metallurgical coke producer, faced financial crisis due to adverse market conditions, leading to unsuccessful debt restructuring attempts and eventual liquidation order.
3. The company's authorized share capital, financial history, and operational details were presented to provide context for the scheme of compromise and arrangement.
4. The company's journey included corporate debt restructuring, insolvency application under the Insolvency and Bankruptcy Code, appointment of resolution professional, failed resolution plan submissions, and eventual liquidation order due to lack of approved resolution plan.
5. The introduction of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 impacted the existing resolution plan, leading to the submission of a new plan by a third party which was not approved by the creditors.
6. The Tribunal directed the liquidator to dispose of the company within a specified timeline, highlighting the urgency and complexity of the situation.
7. The current application sought approval for convening meetings of shareholders, FCCB holders, unsecured creditors, and secured creditors to consider and approve a new scheme of compromise and arrangement.
8. Detailed procedural instructions were provided for convening and conducting the meetings, including notice requirements, quorum, proxy voting, and valuation considerations.
9. The Tribunal disposed of the application, emphasizing the need for parties to act in accordance with the order and providing for the supply of urgent certified copies of the order upon request.

---