Prag Distillery, a subsidiary of Tilaknagar Industries engaged in the production of alcoholic beverages, has successfully obtained approval from the National Company Law Tribunal (NCLT) to withdraw the ongoing liquidation proceedings. This favorable outcome is a direct result of the company reaching a settlement with its financial creditors, namely Standard Chartered Bank and DCB Bank. Consequently, the board of directors of Prag Distillery, which is situated in Andhra Pradesh, has been reinstated as a significant outcome of this development.
The Mumbai bench of the NCLT has granted approval for the section 12A plea filed by the liquidator, accepting the proposal to withdraw the petition against Prag Distillery. This decision comes after the Committee of Creditors (CoC) unanimously voted in favor of the withdrawal, with 100 percent of the votes supporting the proposal.
After receiving a payment of USD 22,50,000 as a full and final settlement, the financial creditors have issued a no-dues certificate as well.
“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.
The Insolvency & Bankruptcy Code provides the provision of Section 12A, which permits the withdrawal of applications filed by both financial and operational creditors.
Prag Distillery underwent the initiation of the Corporate Insolvency Resolution Process (CIRP) on June 27, 2017. Following its inability to secure a buyer, the Committee of Creditors (CoC) unanimously resolved on March 23, 2018, to proceed with the liquidation of the company.
Previously, Tilaknagar Industries and Standard Chartered Bank, the financial creditor of Prag Distillery, reached an agreement to resolve and settle all outstanding dues of the entity.
In accordance with the agreement, Tilaknagar Industries made a payment of USD 22,50,000 to Standard Chartered Bank on behalf of Prag Distillery.
Tilaknagar Industries had reached a settlement agreement with DCB Bank Ltd., the sole remaining financial creditor of Prag Distillery.
Furthermore, Tilaknagar Industries made a payment of approximately INR 14 crore to fully settle all the operational creditors of Prag Distillery.
In the financial year ending March 2023, Tilaknagar Industries, the owner of multiple brands such as Mansion House Brandy, Courrier Napoleon Brandy, Mansion House Gold Whisky, and Blue Lagoon Gin, recorded a consolidated revenue from operations amounting to INR 2,469.27 crore.
