NCLT Allows Withdrawal of Liquidation Proceedings Against Prag Distillery

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posted on 1 year ago — updated on 1 second ago

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Allowing a Section 12A plea filed by the liquidator, the Mumbai bench of the NCLT says the proposal to withdraw the petition against Prag Distillery was approved by 100 per cent votes of the Committee of Creditors

The National Company Law Tribunal (NCLT) has approved withdrawal of the liquidation proceedings against Prag Distillery, an arm of liquor maker Tilaknagar Industries, following a settlement by the company with its financial creditors Standard Chartered Bank and DCB Bank. With the development, the board of directors of Prag Distillery, situated in Andhra Pradesh, has been reinstated.

Allowing a Section 12A plea filed by the liquidator, the Mumbai bench of the NCLT said the proposal to withdraw the petition against Prag Distillery was approved by 100 per cent votes of the Committee of Creditors (CoC). The financial creditors have also issued a no-dues certificate after receiving USD 22,50,000 as a full and final settlement.

“We allow the withdrawal of the company petition and consequent closure of the liquidation process,” NCLT said in its nine-page order passed on June 23. Section 12A of the Insolvency & Bankruptcy Code allows the withdrawal of applications filed by financial and operational creditors.

The Corporate Insolvency Resolution Process (CIRP) was initiated against Prag Distillery on June 27, 2017, and the CoC on March 23, 2018 unanimously decided to liquidate the company after it failed to find a buyer. Earlier, Tilaknagar Industries had entered into an agreement with Standard Chartered Bank, the financial creditor of Prag Distillery, to settle all outstanding dues of the entity.

As per the agreement, an amount of USD 22,50,000 was paid to Standard Chartered Bank by Tilaknagar Industries on behalf of Prag Distillery. Tilaknagar Industries had also entered into a settlement agreement with the only other financial creditor of Prag Distillery, DCB Bank Ltd.

In addition, the company paid an amount of approximately Rs 14 crore to settle, in full, all the operational creditors of Prag Distillery. For the fiscal year ended March 2023, Tilaknagar Industries — which owns various brands, including Mansion House Brandy, Courrier Napoleon Brandy, Mansion House Gold Whisky and Blue Lagoon Gin — reported a consolidated revenue from operations of Rs 2,469.27 crore.