HGIL lender shoots contempt of court notice to successful bidder INSCO

The Supreme Court had disqualified bid of AGI Greenpac for HGIL in January.

Exclusive Capital, one of the lenders of Hindusthan Glass and Industries Ltd (HGIL), has sent a contempt notice to Madhvani group-led INSCO for diverging from the original resolution plan submitted to the Supreme Court, documents accessed by Moneycontrol show.

In the notice dated June 23, Exclusive Capital alleged that despite the top court’s order to pay Rs 356 crore immediately, INSCO is suggesting staggered payment.

If the concerns are not addressed in 48 hours, it would move the Supreme Court against INSCO, the lender said. HGIL’s committee of creditors (COC) is likely to take up the matter on June 24, people privy to the development said. State Bank of India, Edelweiss and Life Insurance Corporation are among the key lenders of HGIL.

“A bare perusal of the Revised Resolution Plan clearly reveals that the upfront cash payment of Rs 356 crore, which was the minimum threshold required to match the commercial offer of AGI, is not being made in accordance with the Supreme Court’s directives. Instead, INSCO has structured the payment in a deferred, staggered or conditional manner, which defeats the very purpose of the court’s direction and substantially alters the undertaking given,” Exclusive Capital said in the legal notice, a copy of which has been reviewed by Moneycontrol.

The lender has also alleged in the notice that INSCO did not include all necessary parties while filing for the nod of Competition Commission of India (CCI), which makes the approval invalid as per rules.

Originally, AGI Greenpac was the front runner for the HGIL acquisition with a bid of Rs 2,752 crore. The Supreme Court in January rejected its bid on the ground that the company did not have CCI approval for the acquisition.

INSCO moved the Supreme Court seeking cancellation of AGI Greepac's bid since the company did not receive CCI approval. The Supreme Court ruled in favour of INSCO.

INSCO, the second bidder in the project, emerged as the front-runner for the acquisition. However, INSCO’s bid of Rs 1,850 crore was much lower than that of AGI Greepac. The Supreme Court asked INSCO to match AGI Greepac's bid, failing which fresh bids would be called. This order was aimed at ensuring maximum recovery for creditors. INSCO agreed to match AGI Greepac's offer.