NCLT Mumbai Approves Greensward Enterprise' ₹181.20 Crore Resolution Plan For Frost International Ltd

The National Company Law Tribunal's Mumbai Bench has approved Greensward Enterprise Pvt Ltd's resolution plan for Frost International Ltd, with a total value of Rs 181.20 crore, including interest on deferred payments. The company has been undergoing insolvency proceedings since February 2023.

The plan secured 69.26% approval from the Committee of Creditors (CoC).

A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar approved the plan while allowing an application filed by Resolution Professional Amit Chandrakant Shah under the Insolvency and Bankruptcy Code.

“In view of the discussions and the law thus settled, the instant Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39(4) of the Regulations. The Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is in accordance with law. The same needs to be approved. Hence, ordered. The Resolution Plan is hereby approved.”, the tribunal noted.

Frost International was admitted into the corporate insolvency resolution process (CIRP) on February 9, 2023, on a petition filed by Bank of India.

During the CIRP, the Resolution Professional conducted multiple rounds of expressions of interest and challenge mechanisms after the initial process failed to attract a resolution plan for the company as a whole. The process was complicated by Enforcement Directorate (ED) attachments over the company's assets. The Committee of Creditors considered removal of the attachment critical for successful resolution and value maximisation.

Following fresh bidding rounds, Greensward Enterprise emerged as the successful resolution applicant.

The approved resolution plan has a total value of Rs 181.20 crore, which includes interest payable on deferred payments. Under the plan, Greensward will make an upfront payment of Rs 57.66 crore within 45 days of NCLT approval. It will also make a deferred payment of Rs 120.89 crore between 270 and 365 days from the approval date.

The successful resolution applicant has furnished a performance bank guarantee of Rs 18.12 crore.

The Tribunal noted that the plan complies with the requirements of the Insolvency and Bankruptcy Code and the CIRP Regulations. It provides for payment of CIRP costs in priority and contains provisions for management and implementation through a monitoring committee.

The bench also took note of an earlier order passed in the CIRP providing that the ED attachment over Frost International's assets would stand removed upon approval of a resolution plan. The tribunal noted that the attachment had previously been identified as a factor deterring prospective resolution applicants and affecting value maximisation.

The tribunal further noted that a dispute relating to the distribution of proceeds attributable to the One BKC property among secured creditors is pending before the Supreme Court. It clarified that the distribution of proceeds attributable to that property would remain subject to the outcome of the appeal.

Approving the plan, the tribunal directed that it would be binding on all stakeholders, including creditors, government authorities, and other concerned parties.

It further directed Greensward Enterprise to implement the resolution plan within the stipulated timelines, including making the upfront payment within 45 days and completing deferred payments within 365 days from the date of approval.