IFCI Limited filed a petition under Section 7 of the IBC Code, seeking to initiate the insolvency resolution process against VBC Industries Limited due to defaults in payment of debentures. IFCI had sanctioned a sum of Rs. 57 crores to VBC Industries for buying out IFCI's existing shareholding in Konaseema Gas Power Limited (KGPL). VBC Industries executed a Debenture Subscription Agreement (DSA) in favor of IFCI. VBC Industries failed to create a subservient charge and defaulted on payments, leading to IFCI classifying the account as a Non-Performing Asset (NPA). IFCI issued a recall notice for Rs. 100,10,21,715/-. VBC Industries argued that the petition was not maintainable as there was no financial debt due to IFCI, claiming the debentures were for buyback of shares
…IFCI Limited sanctioned Rs. 57 crores to VBC Industries Limited for the purpose of buying out IFCI's existing shareholding in Konaseema Gas Power Limited (KGPL). VBC Industries executed a Debenture Subscription Agreement (DSA) in favor of IFCI. Personal guarantees were provided by Shri M.S.P.Rama Rao and Shri M.S.Laxman Rao. IFCI later sanctioned a Funded Interest Term Loan (FITL) on the outstanding Non-Convertible Debentures. VBC Industries failed to create a subservient charge and defaulted on payments. IFCI classified VBC Industries as a Non-Performing Asset (NPA) and issued a recall notice for Rs. 100,10,21,715/-. VBC Industries argued that the debentures were for share buyback and not a financial debt, and that IFCI should have pursued the sale of pledged shares
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IFCI sanctioned an amount of 57 crores by…
VBC Industries Limited executed a Debenture…
IFCI Limited filed a petition under Section 7 of the IBC Code, seeking to initiate the insolvency resolution process against VBC Industries Limited due to defaults in payment of debentures. IFCI had sanctioned a sum of Rs. 57 crores to VBC Industries for buying out IFCI's existing shareholding in Konaseema Gas Power Limited (KGPL). VBC Industries executed a Debenture Subscription Agreement (DSA) in favor of IFCI. VBC Industries failed to create a subservient charge and defaulted on payments, leading to IFCI classifying the account as a Non-Performing Asset (NPA). IFCI issued a recall notice for Rs. 100,10,21,715/-. VBC Industries argued that the petition was not maintainable as there was no financial debt due to IFCI, claiming the debentures were for buyback of shares
…IFCI Limited sanctioned Rs. 57 crores to VBC Industries Limited for the purpose of buying out IFCI's existing shareholding in Konaseema Gas Power Limited (KGPL). VBC Industries executed a Debenture Subscription Agreement (DSA) in favor of IFCI. Personal guarantees were provided by Shri M.S.P.Rama Rao and Shri M.S.Laxman Rao. IFCI later sanctioned a Funded Interest Term Loan (FITL) on the outstanding Non-Convertible Debentures. VBC Industries failed to create a subservient charge and defaulted on payments. IFCI classified VBC Industries as a Non-Performing Asset (NPA) and issued a recall notice for Rs. 100,10,21,715/-. VBC Industries argued that the debentures were for share buyback and not a financial debt, and that IFCI should have pursued the sale of pledged shares
…IFCI sanctioned an amount of 57 crores by…
VBC Industries Limited executed a Debenture…