The Committee of Creditors of Ferro Alloys Corporation Ltd have failed to approve any resolution plan offered by five bidders, within the Insolvency and Bankruptcy Code specified 270-day deadline, which ended today.
The deadline for Facor gets over on April 2, and as the CoC did not accept any of the resolution plans submitted by the bidders, the company will have to go for liquidation, "subject" to a pending final order from the National Company Law Appellate Tribunal, Resolution Professional K G Somani told PTI.
Facor had approached the NCLT appellate body, contesting the insolvency proceedings against it, despite being a corporate guarantor of subsidiary Facor Power Ltd, the defaulting company.
Rural Electrification Corporation (REC), the main creditor, decided to initiate action against the guarantor.
Facor Power Ltd had reported a turnover of Rs 122 crore and net loss of Rs 85.84 crore in 2016-17.
Out of the five bidders, Indian Metals & Ferro Alloys Ltd (IMFA) and Swiss trading outfit IMR Metallurgical Resources were the main contenders.
According to sources, REC objected to IMFA's offer for acquiring only Facor's manufacturing plant, and not the company and its mines.
IMFA's offer was between Rs 250 crore and Rs 300 crore, less than the liquidation valuation of Rs 310 crore, the sources said.
REC's debt exposure in the company is close to 90 per cent in the Rs 750-780 crore claim, including principal and accrued interest.
"We are disappointed that our resolution plan for Facor has not been accepted," an IMFA official said.
The IMR bid was rejected due to differences with its creditors.
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