Tata Cap takes arbitration route to settle Liliput dispute

According to the sources it is known that one of the lending institutions Tata Capital which had dragged the company to the Delhi High Court in January 2012 and had filed winding up petitions against the company over the non-repayment of Rs 10-crore loan is likely to settle the dispute with Lilliput through an arbitration process.

It is known that Tata Capital is likely to convert the loan into a term loan and offer Lilliput a one year moratorium to repay this along with a five year repayment period.

However, a final verdict on the arbitration process is still pending. Similarly, another lending institution China Trust Commercial Bank which had also similarly dragged Lilliput to the Delhi High Court and had filed winding up petitions against the company in February over the non-repayment of a Rs 15 crore loan is likely to settle the dispute with Lilliput through and arbitration process. However this matter is still pending and a decision is likely to be made soon.

On the other hand under the terms and conditions laid down by the lenders who have agreed to restructure Lilliput's Rs 873 crore debt, the promoter Sanjeev Narula will have to raise about Rs 200 crore independently to grow the business and to start meeting the repayments obligations, which kick-start from 2013. The promoter is already in talks with a few strategic investors from the Far East and few global PE players. However, if this deal does not come through then it is likely that the promoter will float an Rs 500 crore IPO in FY14 in order to raise the required amount of money.