Accord wants Orchid to reconsider its bid

Mumbai: Accord Life Spec has filed a petition before the Chennai bench of the National Company Law Tribunal (NCLT) against a decision by the committee of creditors (CoC) to approve the resolution plan by Dhanuka Laboratories to take over debt-laden Orchid Pharma.

The petition was filed last week after Punjab National Bank (PNB) subsidiary, PNB International (PIL), withdrew its consent to the resolution plan, leading to votes in favour of the plan falling below the 66 per cent required. PIL, along with majority of the lenders, had voted in favour of Dhanuka taking over Orchid but pulled out after it found out that its parent had voted against the resolution, bankers said. Without PIL’s consent the plan only gets 65.60 per cent of the vote. PNB did not reply to an email seeking comment.

Taking its chance, Accord, which had lost out to Dhanuka, filed a petition on June 14 asking for its bid to be considered. “The requisite 66 per cent vote, which is required in law for a resolution plan to be approved, has not been approved by M/s Dhanuka Laboratories… the applicant submits that at present, it has proposed to pay a revised sum of Rs 615 crore to the CoC… there is a legitimate and fair chance of there being proper revival with higher value of recovery for creditors if the applicant is given an opportunity to present its plan to the CoC,” the petition said.

Dhanuka had bid less than Rs 1,000 crore for the company that owes lenders Rs 3,200 crore, which means lenders will vote for what will effectively be close to 70 per cent haircut. Lenders favoured Dhanuka over Accord and Covalent Laboratories because it scored higher in qualitative matrix like sources of funds, financial position and track record.

“PIL’s withdrawal after voting in favour has complicated the situation. However, there is no proposal in the law to pull out after having voted in favour. We don’t think this will stand scrutiny in court and hence Dhanuka’s bid should make it,” said a banker familiar with the case.