NCLT Delhi Approves Western UP Tollway Scheme, Slashing Equity Capital From ₹114.87 Crore To ₹1.48 Crore

The New Delhi bench of the National Company Law Tribunal (NCLT) has sanctioned a scheme of arrangement for Western UP Tollway Pvt. Ltd. The scheme cuts paid-up equity share capital from Rs 114.87 crore to Rs 1.48 crore.

The bench comprising Judicial Member Bachu Venkat Balaram Das and Technical Member Ravindra Chaturvedi observed that the scheme did not appear prejudicial to shareholders or creditors.

“This Tribunal is of the considered view that the Scheme of Arrangement proposed amongst the Petitioner Company and does not appear to be prejudicial to the interests of equity shareholders and creditors of the Petitioner company.”

Western UP Tollway was incorporated as a public limited company in 2005 and converted into a private limited company in 2024. It operates and maintains a 77.8-km four-lane highway between Meerut and Muzaffarnagar under a concession agreement with NHAI.

Its share capital is held by Cube Highways Trust, an Infrastructure Investment Trust registered with SEBI. The board approved the scheme on July 28, 2025.

The company told the tribunal that accumulated losses from higher finance costs and depreciation had left retained earnings negative. It could not declare dividends despite surplus cash.

The scheme provides for adjusting accumulated losses against securities premium, deemed capital contribution and Equity Component-NCDs. It also provides for cancellation of shares and repayment of their current value to the parent entity.

Equity share capital will fall from Rs 114.87 crore to Rs 1.48 crore. Securities premium of Rs 83.92 crore, deemed capital contribution of Rs 1.79 lakh and Equity Component-NCDs worth Rs 156.36 crore will fall to nil.

The securities premium, deemed capital contribution, and Equity Component-NCDs will be adjusted against accumulated losses. Part of the Rs 113.39 crore equity capital reduction will also be adjusted against accumulated losses, with the remainder paid to shareholders.

Earlier, the tribunal dispensed with meetings of equity shareholders, secured creditors and unsecured creditors. It later directed notices to statutory authorities.