Promoters of Dharani Sugars regain management as NCLT accepts settlement Proposal

Dharani Sugars and Chemical compounds Ltd (DSCL), a listed firm, efficiently emerged from the company insolvency decision course of, because the Nationwide Firm Regulation Tribunal (NCLT) Chennai Bench accepted the promoter’s settlement proposal, enabling the withdrawal of the decision course of (RP).

With the NCLT order, management of DSCL returns to promoter Palani G Periasamy (PGP). This marks PGP’s second profitable case earlier than the NCLT, having regained management over Appu Resorts, which operates Le Royal Meridien Resorts in Chennai and Coimbatore.

“NCLT order permitting our proposal for DSCL affirms our dedication and constant efforts for the revival of sugar and allied companies. NCLT order has paved the way in which for PGP group, the unique promoters for regaining management of DSCL,” mentioned Periasamy, Chairman, DSCL.

Chennai-headquartered Dharani Sugars goals to renew operations at its three factories positioned in Vasudevanallur, Polur, and Kallakurichi in Tamil Nadu, collaborating with over 35,000 cane growers to maintain its contribution to Tamil Nadu’s sugar financial system. The corporate expects to restart operations in 2-3 months after refurbishing idle gear and course of equipment.

Higher prospects

“The Indian sugar sector’s development prospects are promising, given the rising demand for sugar and the federal government’s concentrate on producing ethanol instead gasoline and energy from bagasse,” Periasamy added.

Dharani Sugars confronted losses from 2016-19 attributable to consecutive rainfall failures and related components, resulting in diminished capability utilisation, substantial losses, and a liquidity disaster. The loans of the consortium of lenders couldn’t be paid. Admitted into the CIRP by the NCLT Chennai Bench in July 2021, the corporate’s promoters tried to revive it by repaying financial institution loans and exiting the method.

Regardless of paying 35 per cent of the agreed quantity to the consortium lenders and submitting a proposal below IBC Guidelines’ part 12A, the promoters couldn’t safe the remaining funds on time. Consequently, the NCLT Chennai Bench issued liquidation orders on March 18, 2023. Challenged within the Supreme Courtroom, the liquidation order was stayed in August 2023.

In September 2023, lenders led by Indian Financial institution positioned a ₹619 crore (NCLT admitted declare) mortgage on the market at a suggestion worth of ₹222.5 crore. Below the Swiss Problem public sale course of, the Central government-owned bad-loan financial institution NARCL (Nationwide Asset Reconstruction Firm Ltd) emerged as a profitable bidder. NARCL took over the loans of 10 lenders excluding these from IREDA and the Sugar Growth Fund (SDF).

The 12A proposal was authorized by the Committee of Collectors consisting of NARCL, IREDA & SDF with a voting of 92.6 per cent, and the lead financial institution Financial institution the proposal to withdraw the CIRP course of by means of the Decision Skilled.

The 12A proposal was authorized by the NCLT Chennai Bench and it pronounced the order on Could 9, 2024. In consequence, the unique promoters have taken over the management and administration of the affairs of the corporate. The powers of the Board of Administrators are restored with instant impact.