NCLT Hyderabad Approves Beaufond's ₹70.11 Crore Resolution Plan for KOBO Biotech With Restructuring Plan

The Hyderabad bench of the National Company Law Tribunal has approved Beaufond Industries Ltd's ₹70.11 crore resolution plan for KOBO Biotech Ltd.

The plan provides for a composite restructuring. Beaufond will merge into KOBO Biotech, the API business will be demerged into a separate entity, and the surviving company will be renamed Beaufond Ltd.

The coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri clarified that while approval of the resolution plan would suffice to implement the restructuring for KOBO Biotech, other entities involved in the scheme would still need to follow the prescribed Companies Act process.

“Approval of the said scheme by this Authority as part of the resolution plan shall be sufficient insofar as the Corporate Debtor herein is concerned. However, in respect of the other companies forming part of the said scheme, the procedure prescribed under Sections 230–232 of the Companies Act, 2013 shall continue to apply.”

KOBO Biotech was admitted to the corporate insolvency resolution process in August 2024 on a plea by JM Financial Asset Reconstruction Company Ltd.

Its first resolution process failed after the then successful resolution applicant, CVK Technologies Pvt Ltd, did not furnish the required performance bank guarantee. The committee of creditors then revoked the letter of intent and forfeited the deposited amount.

A fresh process was initiated thereafter. Beaufond's resolution plan was eventually approved with 100% voting share of the committee of creditors.

Beaufond, a public limited company incorporated in September 2023, is engaged in industrial and biotech investment activities.

Under the approved plan, the total payout is ₹70.11 crore, including approximately ₹2.30 crore towards CIRP costs. Against admitted claims of ₹353.59 crore, this translates into a recovery of 19.18%.

The fair value of KOBO Biotech was assessed at ₹75.52 crore. Its liquidation value was pegged at ₹56.73 crore.

The tribunal found that the plan complied with all insolvency law requirements, including priority payment of CIRP costs, provisions for management and supervision after approval, and implementation mechanisms.

“Therefore, the resolution plan submitted by Beaufond Industries Limited, when tested on the touch stone of the aforesaid facts and the rulings, we are of the view that the instant resolution plan satisfies the requirements of Section 30 (2) of the Code and Regulations 37, 38, 38 (1A) and 39 (4) of the Regulations. We also find that the Resolution Applicant is eligible to submit the Resolution Plan under Section 29A of the Code."

The bench also found Beaufond eligible to submit the resolution plan.

It directed that the ₹10 crore performance security furnished by Beaufond would remain in place until payments to creditors are completed. The security will continue until the resolution plan is fully implemented.

With the approval of the resolution plan, the moratorium imposed during the insolvency proceedings stands terminated.

For Applicant (Resolution Professional, Ms. Namrata Amol Randeri): Ms. Mano Ranjani and Mr. M Rama Rao, Learned Counsels