US Hedge Fund Gets NCLT Nod To Acquire IVRCL’s Bankrupt Arm

US-based hedge fund Silver Point Capital secured the approval of India’s National Company Law Tribunal’s (NCLT) to acquire the bankrupt IVRCL Chengapalli Tollways Ltd., a special purpose vehicle (SPV) promoted by IVRCL Ltd.

The Hyderabad bench of the NCLT passed an order on 1 May, clearing the creditors-approved resolution plan for the infrastructure construction services provider, according to the tribunal’s order.

The Greenwich, Connecticut-based hedge fund, which focuses on credit and special situations investments, had submitted its bid through its principal vehicle SPCP Luxemburg Strategies S.A.R.L.

The successful bidder’s resolution plan offers to pay about 1,465 crore rupees ($179 million) to acquire IVRCL Chengapalli Tollways under the insolvency process, against the total claim of about 1,514 crore rupees.

“The resolution plan proposes to repay all stakeholders (as provided for under the plan) in full, including secured financial creditors,” the NCLT order, passed by the division bench of Justice Telaprolu Rajani and Technical Member Charan Singh, said.

The Hyderabad, Telangana-based company went under the insolvency resolution in April 2022 following a petition by Assets Care & Reconstruction Enterprise Ltd. (ACRE) and BDO Restructuring & Advisory LLP’s Sutanu Sinha was appointed as the company’s resolution professional.

IVRCL Chengapalli Tollways had originally borrowed from lenders, including IDBI Bank, State Bank of India, Bank of Baroda, Union Bank of India and Karur Vysya Bank. However, the lenders assigned their debts to ACRE in 2021, after which it approached the tribunal to recover the dues.

The company’s committee of creditors approved the resolution plan submitted by SPCP Luxemburg in March 2023, with a 100% majority.

IVRCL Chengapalli Tollways is engaged in the business of construction and maintenance of motor ways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways.

(Note: $1 = 81.7147 Indian rupees)

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