Kolkata, May 9 (PTI) The insolvency proceedings against Birla Tyres Ltd by the National Company Law Tribunal (NCLT) will “derail” the revival process that has been underway, a senior company official said. He said the revival exercise could have saved the jobs of close to 1,000 employees.
The NCLT has ordered the initiation of insolvency proceedings against Birla Tyres Ltd in a case filed by multi-business chemicals firm SRF Ltd, an operational creditor of the B K Birla group firm.
A two-member Kolkata bench of the NCLT has also appointed Seikh Abdul Salam as Interim Resolution Professional (IRP) to run the operations of the company, after suspending the board and also declared a moratorium as per the procedures of the Insolvency & Bankruptcy Board (IBC).
SRF had claimed a default in payment of Rs 15.84 crore, which includes a principal of Rs 10.06 crore and interest of Rs 5.78 crore, for the supply of Tyre Cord Fabric as of July 8, 2021.
“The company had initiated a process of composite scheme of demerger and compromise to take care of around Rs 1,050 crore secured debt by banks and small operational creditors.
“But, the insolvency proceedings will derail the entire revival process. We are evaluating and may approach the Appellate Tribunal,” the official told PTI.
The Manjushree Khaitan-led group firm was planning to demerge its passenger car radial business into a separate company – Birla Tyre Radials – as part of the restructuring to facilitate the entry of a strategic partner or investor.
Birla Tyres was demerged from the group’s flagship firm Kesoram Industries in 2018. PTI BSM RBT RBT
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