Creditors to Kishore Biyani’s Future Enterprises Ltd (FEL) have scrapped a simultaneous voting process to find a buyer for the beleaguered company’s insurance stakes and manufacturing units after one of the bidders sought to raise its offer for two apparel manufacturing plants.
Instead, a fresh voting process has commenced solely to consider Central Bank of India’s offer for FEL’s insurance stake, people aware of the matter said.
“Earlier this month, voting was started for both FEL’s insurance stake as well as the manufacturing units but it was discontinued because the losing bidder for the units successfully petitioned the NCLT to revise its bid. So this week, voting has begun to consider the Central Bank’s offer for the insurance stakes,” said one of the persons cited above.
Creditors had divided FEL’s assets into three clusters – insurance, textile businesses, and other residual stakes including its investments in a manufacturing unit each at Tarapur-Palghar in Maharashtra and Mahadevapura-Bengaluru in Karnataka.
Central Bank had emerged the highest bidder for the insurance business, while metals company Orissa Metaliks had pipped Mumbai-based financial services firm Uniworth Finlease with a ₹75 crore offer for the manufacturing units, ET had reported on March 21.
“Uniworth which had offered just ₹15 crore came back to creditors and has taken NCLT permission to increase its offer to around ₹85 crore. Though a formal offer is not on the table yet, it is likely that Orissa Metaliks may also challenge this NCLT decision. Meanwhile, Central Bank which is also the lead creditor, insisted that voting for the insurance business be done,” said the person cited above.
Central Bank and resolution professional Avil Menezes did not reply to separate emails seeking comment.
To be sure, the current offers for both the insurance and manufacturing units are well below liquidation value and mean a recovery of less than 5% for creditors with total admitted claims of ₹13,540 crore.
Central Bank is also the largest creditor to the group with more than ₹4,000 crore of admitted claims between the bank and its arm Centbank Financial Services. Its offer of ₹508 crore for FEL’s insurance stakes is much less than the ₹800 crore liquidation value ascribed to the insurance business. Indian bankruptcy rules do not forbid creditors from also becoming resolution applicants.
