In the ongoing insolvency proceedings with the NCLT, J Kumar Infraprojects has submitted a proposal to acquire Pranav Construction for INR 45 crore. This move has been approved by the bankruptcy court. The acquisition involves taking over the real estate company, with J Kumar Infraprojects addressing admitted liabilities amounting to approximately INR 212 crore. This strategic step comes within the framework of the insolvency process, signalling a significant development in the financial restructuring and resolution of Pranav Construction's assets and liabilities. The National Company Law Tribunal's approval binds all stakeholders involved in the resolution plan.
In a significant development, the National Company Law Tribunal (NCLT) has approved J Kumar Infraprojects' bid to acquire Pranav Construction Systems Pvt Ltd. The Mumbai-based infrastructure firm, known for its involvement in metro-rail projects in Mumbai, Delhi, and Ahmedabad, has successfully navigated the insolvency process, with lenders unanimously supporting the revival plan. As part of the acquisition, J Kumar Infraprojects has proposed a payment of INR 45 crore, aiming to acquire the real estate firm despite its admitted liabilities of approximately INR 212 crore.
Pranav Construction Systems, a manufacturer specializing in fabrication of precast iron structures, will complement J Kumar Infraprojects' existing portfolio. The targeted company is engaged in the design, manufacturing, supply, and installation of precision-oriented formworks, scaffoldings, centring material, and accessories crucial in housing, metro, and monorail projects.
The National Company Law Tribunal (NCLT), Mumbai bench, emphasized the binding nature of the approval of the corporate debtor, its employees, members, creditors, and other stakeholders. This includes government entities to whom debts are due under existing laws.
Before obtaining the tribunal's approval, Revive Realty Ltd, another bidder, raised objections alleging that the resolution professional had granted special favors by extending the submission timeline to the successful bidder. Senior advocate Zal Andhyarujina, representing the resolution professional, countered this claim, asserting that lenders had requested Revive Realty Ltd to revise its plan and improve the financial offer, but the proposal remained unchanged. The tribunal, after setting aside the objection petition, highlighted that the successful bidder's plan outperformed the objector's, considering factors such as feasibility and viability.
This development occurs against the backdrop of a larger trend in India, with 7,058 companies from various sectors brought into administration under the Insolvency and Bankruptcy Code since it started in 2016. Data from the Insolvency and Bankruptcy Board of India reveals that among these companies, approximately 38% were from the manufacturing sector, with 1,288 successfully undergoing resolution plans as of September-end 2023.
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