NCLT Kochi Allows First Motion For Foam Mattings–KSCCL Amalgamation Scheme

The Kochi Bench of the National Company Law Tribunal (NCLT) on 1 June allowed the first motion application for the proposed amalgamation of Foam Mattings (India) Limited (FOMIL) with The Kerala State Coir Corporation Limited (KSCCL).

Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy dispensed with meetings of secured creditors after noting that creditors representing 100 per cent of the secured debt had given consent affidavits. The Bench observed:

“Under Section 230(9) of the Companies Act, 2013, this Tribunal may dispense with the meeting of creditors only when creditors representing at least ninety per cent in value have given their consent to the proposed Scheme by way of affidavits.”

The Tribunal heard a joint application seeking approval for the proposed scheme between the two Kerala Government-owned companies and issued directions on the first motion. The companies submitted that the amalgamation would create operational synergies, reduce costs, rationalise administrative expenses, and improve efficiency.

It noted that both Boards had approved the scheme, with 1 April 2025 as the appointed date. It also recorded that the Government of Kerala, the sole shareholder in both companies, approved the scheme through Government Order No. G.O.(Ms) No. 76/2025/ID dated 16 October 2025.

The Bench also held that this approval satisfied the requirement of equity shareholder consent under Section 230(9) of the Companies Act. It also dispensed with the meeting of unsecured creditors of FOMIL, as creditors representing 96.50 per cent in value had consented.

However, it found that KSCCL's unsecured creditors had consented only to the extent of 66.89 per cent in value, which fell short of the statutory threshold of 90 per cent required for dispensation.

Since the requirement was not met, the Tribunal rejected KSCCL's request to dispense with the meeting and directed it to convene a meeting of its unsecured creditors within 45 days through hybrid mode. It also issued directions on notice publication, service to stakeholders and authorities, quorum, voting procedure, and submission of the Chairman's report.

Accordingly, the NCLT allowed the first motion.

For Applicants: CA Sreeram Sekar