NCLT orders liquidation against Nicco

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SME Times News Bureau | 18 Oct, 2017
The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday ordered liquidation proceedings against Nicco Corporation Ltd after its lenders voted against a resolution plan.

Referring the case, the status report of the bench for Tuesday said it was "under liquidation process under section 14 of the Insolvency and Bankruptcy Code (IBC)".

Nicco Corporation initiated insolvency resolution process under section 10 of the IBC, which was admitted by the Kolkata bench of the tribunal on May 2, 2017.

"A resolution plan prepared by the corporate debtor was circulated among lenders and they have asked for some changes. Accordingly, the changes were incorporated and re-circulated among lenders. But the lenders voted against the resolution plan," a source close to the development said.

The company had secured credit facilities from a total of 12 consortium banks, including State Bank of India and Allahabad Bank.

But it defaulted in repaying loan and interest to the tune of Rs 300 crore to banks and financial institutions, said another informed source.

The company had reported a net loss of Rs 28.60 crore in 2016-17.

The cable maker, in its June quarter results of the current financial year, said temporary suspension of work had been declared for its two units at Baripada (Odisha) and Shyamnagar (West Bengal) with effect from April 23, 2015 due to "acute fund constraint and allied labour issue".

The flagship company of the Nicco Group had filed a reference with the Board for Industrial & Financial Reconstruction (BIFR) which declared that company had become a sick industrial company vide its order dated August 23, 2011.