NCLT OKs Prow­ess’ Res­o­lu­tion Plan

RARE CASE This is one of the first few suc­cess­ful res­o­lu­tions where a bank­ruptcy case man­aged to es­cape liq­ui­da­tion

The Economic Times - - Finance & Commodities - Saikat.Das1@ times­group.com

Mu­tual cred­i­tor sup­plied se­lect man­u­fac­tur­ing ma­te­ri­als. to­tal bill of about ₹ 74 lakh paid nearly one-third of the sum Mum­bai: The Na­tional Com­pany Law Tri­bunal has ap­proved a res­o­lu­tion plan for Prow­ess In­ter­na­tional, a Jamshed­pur-based ser­vice provider to the iron and steel sec­tor, af­ter the com­pany cited ris­ing cash flows and a swelling or­der book to demon­strate be­fore the ded­i­cated bank­ruptcy court its abil­ity to re­pay loans.

This is one of the rare ex­am­ples of suc­cess­ful res­o­lu­tions wherein a bank­ruptcy case filed by a trade cred­i­tor has not re­sulted in the liq­ui­da­tion of the com­pany. If it did, sev­eral jobs may have been com­pro­mised. The case was filed by the Navi Mum­bai-based Parker Han­nifin In­dia. Prakash Ku­mar, CEO of Prow­ess In­ter­na­tional, sub­mit­ted the plan. Pun­jab Na­tional Bank led the com­mit­tee of cred­i­tors. Kolkata-based Arun Ku­mar Gupta was the in­sol­vency res­o­lu­tion pro­fes­sional.

“The op­er­a­tional cred­i­tor and PNB both look con­vinced about the res­o­lu­tion plan even though they may have to forgo some amount,” said an ex­ec­u­tive fa­mil­iar with the mat­ter.

The res­o­lu­tion plan pre­sented by Prakash Ku- mar in­cluded doc­u­ments to show the fi­nan­cial and op­er­a­tional strengths of the com­pany, in­clud­ing con­firmed or­ders worth .₹ 29.47 crore and cash flow pro­jec­tions for the next six months.

The case was ad­mit­ted for in­sol­vency pro­ceed­ings in April. Three years ago, the op­er­a­tional cred­i­tor sup­plied se­lect man­u­fac­tur­ing ma­te­ri­als and raised a to­tal bill of about .₹ 74 lakh. Prow­ess paid about a third of the sum.

Later in May, both par­ties wanted to with­draw the pe­ti­tion cit­ing an am­i­ca­ble so­lu­tion af­ter the com­mit­tee of cred­i­tors had held its first meet­ing. But the court de­clined to ac­cept this in­terim so­lu­tion.

THE CASE Three years ago,

It raised a Prow­ess only Res­o­lu­tion plan in­cludes: Doc­u­ments to prove fi­nan­cial, op­er­a­tional strength of debtor Cash flow pro­jec­tion for the next six month

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