The National Company Law Tribunal (NCLT), Chennai, has approved the Rs 526-crore resolution plan of ASG Hospital for the Chennai-based eye care chain Vasan Health Care.
The resolution plan amount comprises a payment of Rs 394 crore to the stakeholders, employees, and creditors, and Rs 126 crore towards capex and working capital in order to revive the eye care hospital.
The plan provides for payment of dues to creditors, employees, and stakeholders within 30 days from the date of approval. The NCLT passed its order on February 3.
This clears the way for ASG to take over the business of Vasan Eye Care as soon as it pays the stakeholders, employees, and creditors.
Significantly, this was the first IBC case admitted in Chennai in 2017 under the Insolvency and Bankruptcy Code, 2016. After a two-year stay by the Madras High Court, the insolvency process was revived on October 3, 2019.
Vasan Eye Care is a well-established brand that operates 97 centres offering affordable eye care across the southern states / union territories (Tamil Nadu, Puducherry, Andhra Pradesh, Telangana, Kerala, and Karnataka). It has about 1,800 employees, and 200 doctors.
ASG, promoted by doctors from AIIMS (New Delhi), runs super specialty hospitals at 49 locations — 47 across northern India, and one each at Nepal and Uganda.
The turnaround proposal by ASG Hospital includes equity infusion for improvement of business operations, setting up a professional management team, retaining existing talent, rehiring lost talent, and hiring new doctors and staff to fill gaps.
The acquisition of Vasan Eye Care will give ASG a wider geographical footprint with hospitals in more than 20 states.
While clearing the resolution plan, the NCLT directed the Resolution Professional to pay the entire admitted amount of EPF dues in light of the orders passed by NCLAT in the Jet Airways case, wherein it was held that non-payment of the dues to the Employees Provident Fund Organisation would amount to a breach of IBC provisions. Subsequently, the Supreme Court upheld this decision.
Expressing his happiness over the order, S Rajendran, Resolution Professional, said that his team faced multiple challenges during the process. “It’s great to be able to revive the company under the IBC process with support from all stakeholders,” he added.
