Bharat Forge’s resolution plan for Sanghvi Forging has been approved by the committee of creditors.
Forging company Bharat Forge (BFL) on Thursday announced the acquisition of 100% stake in Nouveau Power & Infrastructure, a group company 100% owned by promoters of BFL. This is part of the resolution plan approved by the National Company Law Tribunal’s (NCLT) Ahmedabad Bench for the acquisition of Sanghvi Forgings & Engineering under the Insolvency and Bankruptcy Code, 2016. The acquisition of Sanghvi Forgings has to be carried out through a SPV.
BFL said that for a better strategic alignment, it was acquiring Nouveau Power as an SPV to acquire Sanghvi Forgings. Nouveau has not reported any turnover for the last three years and was set up in 2011, initially to enter the power business, but later to manufacture forgings and casting for automotive and other engineering industry and to get into JVs and collaboration. This SPV will now be a wholly owned subsidiary of Bharat Forge.
Bharat Forge’s resolution plan for Sanghvi Forging has been approved by the committee of creditors. The NCLT Ahmedabad Bench approved the resolution plan on April 26 and the first step was setting up or acquiring an SPV and capitalisation of the acquisition.
As per the order, the SPV will infuse an initial amount of Rs 5 lakh into the corporate debtor and additional funds of Rs 14.62 crore. The SPV has to pay off Rs 77.06 crore, of which Rs 75 crore will be paid to the secured financial creditors, Rs 6.54 crore to workmen and employees, and Rs 2 crore to other creditors. There will be an infusion of additional funds of Rs 10 crore to improve operations of Sanghvi Forgings. This is to be funded through internal accruals and other funding sources available to BFL.