NCLT Chennai Allows First Motion In Apollo Hospitals Scheme, Orders Stakeholder Meetings

The National Company Law Tribunal (NCLT) at Chennai has recently directed meetings of equity shareholders as well as secured and unsecured creditors, while dispensing with such meetings in certain cases, in a composite scheme of arrangement involving Apollo group companies.

A coram of Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy was dealing with a joint application filed by Apollo Hospitals Enterprise Limited, Apollo Healthco Limited, Keimed Private Limited, and Apollo Healthtech Limited under Sections 230–232 of the Companies Act, 2013.

According to the companies, the scheme proposes the “carving-out of the Identified Business Undertaking” from Apollo Hospitals Enterprise Limited and its transfer to Apollo Healthtech Limited.

The companies submitted that the restructuring would enable them to “focus on their respective businesses” and lead to improved efficiency, synergies, and optimal utilisation of resources.

Taking on record the material placed before it, the tribunal, in respect of Apollo Hospitals Enterprise Limited, directed the convening of meetings of equity shareholders, secured creditors, and unsecured creditors on specified dates, times, and modes as set out in the order.

In the case of Apollo Healthco Limited, the tribunal noted that consent affidavits representing 100% of equity shareholders and secured creditors had been obtained and accordingly dispensed with the requirement of convening their meetings. However, it directed that a meeting of unsecured creditors be convened.

Similarly, for Keimed Private Limited, the tribunal recorded that consent affidavits representing 99.94% of equity shareholders and 100% of secured creditors were on record and dispensed with their meetings. A meeting of unsecured creditors was, however, directed to be held.

With respect to Apollo Healthtech Limited, the tribunal recorded that there are “NIL Secured Creditors” and “NIL Unsecured Creditors” and that consent of 100% of equity shareholders had been obtained. Accordingly, it dispensed with the requirement of convening any meetings.

The tribunal further directed that individual notices of the meetings be issued at least 30 days in advance along with copies of the scheme and explanatory statement and that advertisements be published in newspapers. It also appointed a Chairperson and Scrutinizer for the meetings and directed that reports be filed within the prescribed timelines.

“All the aforesaid directions are to be complied with strictly in accordance with the applicable law including forms and formats contained in the Companies (Compromises, Arrangements & Amalgamations) Rules, 2016 as well as the provisions of the Companies Act, 2013 by the Applicants,” the tribunal said.

Accordingly, the first motion application was allowed.

For Applicants: Advocates Allwin Godwin, Akhila J and Niranjana Pandian