BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION

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Case No.70/2006 Duncans Industries Ltd. (DIL) 31.3.2006, which resulted in losses and erosion of entire net worth of the company. 1.8 The Company has now entered into an Investment Agreement dated 18.6.2010 with M/s Jaypee Fertilizers & Industries Ltd (JFIL) (a Jaypee Group company) as a strategic investor (SI) for revival of the Fertiliser Division. 1.8.2 The rehabilitation measures, inter alia, envisage de-merger of all the assets and liabilities of Fertiliser Unit and transfer and vesting of the same into a new company M.s Kanpur Fertiliser & Cement Ltd (KFCL). The Tea business shall be left in residual DIL. Infusion of fresh funds into the new company by a Joint Venture Company (JV Co.) M/s Jaypee Uttar Bharat Vikas Ltd ( JUBVPL) of JFIL (SI) and M/s ISG Traders Ltd (a part of promoter group of DIL) is envisaged. 1.8.3 The OA has submitted DRS which proposes cost of scheme aggregating to Rs 1059.40 Cr as under: Particulars Amount(Rs\Cr) 1 One Time Settlement (OTS) of the dues 257.21 of the secured creditors 2 Payment of Late payment Charges (Arcil 5.65 and CBI) 3 OTS to other secured creditors 5.78 4 Repayment of WCTL and Loans 35.69 5 Capital Expenditure for conversion of the 241.53 feedstock of the Fertiliser Plant and Tea Division 6 Settlement of the dues of the unsecured 110.19 lenders including fixed deposits 7 Other unsecured creditors/liabilities 73.67 8 Payment of Workmen dues: 112.46 9 Working capital 206.45 1 Payment of Statutory dues 10.77 0 Total 1059.40 1.8.4 The proposed means of finance (Rs 1059.40 Cr) are as under: Particulars Amount (Rs\Cr) 1 Promoters equity in Tea Business 11.65 2 Equity by JV Co in Fertiliser business 400.00 3 Interest free unsecured loans / equity from Promoters in Tea business 30.56 4 Debts by JV Co from WOS / Associates :Rs 335 Cr and in Fertiliser business -- 2 369.62 5 Internal accruals: 247.57 Total 1059.40
Case No.70/2006 Duncans Industries Ltd. (DIL) 1.8.5 As against the principal outstanding amount of Rs 616.70 Cr of the secured creditors, the company has entered into OTS for Rs 271.55 Cr (including Rs 14.34 Cr already paid). The company to settle the dues of Fixed Deposit holders at 85% which comes to Rs 66.07 Cr. The company has entered into an MOU with the workmen of fertilizer undertaking and has incorporated their dues in the DRS. Duncan Voluntary Retired & Pensioners Employees Association (DVREPA) have also agreed for settlement of their dues and the company has incorporated dues of DVREPA amounting to Rs 4.09 Cr in DRS. ARCIL, the largest lender with 47.15% share in o/s dues of secured creditors, has conveyed its confirmation vide letter dated 06.01.2011 accepting the settlement amount proposed to be paid to the secured lenders as envisaged in the DRS. Other major secured creditors except WBIDC & PICUP ( which constitute 2.53% of the total dues of secured creditors) have also agreed for the OTS offer of the company. Thus, 97.47% of the secured creditors have accepted the OTS offer. 2 REFERENCE TO BIFR 2.1 The company, based on ABS 31.3.2006, filed a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act 1985 (hereinafter referred to as the Act ). In the hearing held on 21.2.2007, the Bench declared the company as sick company u/s 3(1)(o) of the Act. The Bench noted that the provisions of Section 18 of SICA would have to be explored in public interest in relation to the company. Accordingly, in terms of the powers available u/s 17(3) of SICA, the Bench appointed State Bank of India (SBI) as the Operating Agency (OA) with directions to prepare a revival scheme for it, if feasible. The Bench inter-alia issued the following directions: i) Individual holders of fixed deposits were free to negotiate with the company to secure repayment of their dues or to approach the Company Law Board (CLB) u/s 58A of the Companies Act or to file suits for recovery of their dues. 2.2 The company preferred an appeal against directions of Board in respect of fixation of cut off date as 31.3.07 and in respect of Fixed Deposit of individual holders in BIFR Order dated 21.2.2007. Hon ble AAIFR, vide order dated 14.12.2007, set aside the aforesaid direction/guidelines. 2.3 In the hearing held on 26.5.2009, the Bench directed the company to commence the process of startup activities and also commence its operations within a month as GOI had already accorded permission to DIL to re-commence operations based on Naphtha. -- 3
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