Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
The real estate and construction firm Renaissance Indus Infra has been accepted into the corporate insolvency resolution process (CIRP) as a result of a request made by Catalyst Trusteeship, one of its financial creditors. Following the company's failure to repay a debt of approximately Rs 444 crore, the lender filed a petition with the bankruptcy court.
The Renaissance Group first received money from Edelweiss Financial Services for its special purpose vehicle (SPV) projects RUIPL and Renaissance India. The company proposed to refinance the outstanding amount with Edelweiss and obtain extra funding for the project development costs in accordance with the debt term sheet negotiated in 2018.
According to the loan term sheet that Altico Capital India and the company had agreed to, Altico had committed to subscribe to non-convertible debentures (NCDs) totalling Rs 390 crore. However, only Rs 280 crore was actually paid out. As a result, a debenture trust deed was signed in June 2018 by the business as the issuer and Vista ITCL India as the debenture trustee. Altico as debenture holder transferred all its rights under the debentures as well as the underlying security interest and rights created by Renaissance Group, and other obligations related to these debentures to the financial creditor in March 2021.
Nishit Dhruva, managing partner of the legal firm MDP & Partners, contended on behalf of the lender that the corporation began making late payments on its debts starting in March 2021 and every quarter end after that. Renaissance Group asserts that the petition should have been dismissed because only the debenture trustee or a financial creditor acting jointly with the trustee may make such a claim. A financial creditor cannot make such a petition on their own. The financial creditor is an initial assignee under the assignment agreement as of March 2021 and the tribunal has thus rejected the argument while stating that the petitioner is clearly qualified to do so.
According to the conditions of the Inter Creditor Agreement signed in June 2018 and purposefully omitted by the financial creditor while making the plea, the company had also argued that the financial creditor had no jurisdiction to file the petition. Even this argument put out by the firm was irrelevant in the tribunal's opinion. The tribunal has noted that the June 2018 Inter Creditor Agreement specified that finance parties are intended to collectively mean debenture trust deed, debenture holders and any agent of the debenture trustee and as a result can bring legal action.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
