CHENNAI: With an insolvency application against Dharani Sugars and Chemicals being withdrawn from the National Company Law Tribunal (NCLT) on Wednesday, three sugar factories will soon be revived. This move will benefit more than 30,000 sugarcane growers in Vasudevanallur in Tirunelveli district, Polur in Tiruvanamalai district and Sankarapuram in Kallakurichi district.
The proposal under 12A was approved by NCLT resulting in restoration of power to the board of directors, a release stated. The company suffered losses during 2016-19 as a result of consecutive failures of rainfall and other reasons. As a result, the loans of the consortium of lenders could not be repaid and the company was admitted into the Corporate Insolvency Resolution Process by the NCLT’s Chennai Bench in July 2021.
The promoters, however, have been taking continuous efforts to revive the company by making payments to the banks, the release said. They had paid 35% of the agreed amount to the consortium lenders as part of payment and submitted a proposal under section 12A of the Insolvency and Bankruptcy Code (IBC) Rules, to the committee of creditors. Since the promoters couldn’t arrange the balance funds on time, the NCLT Chennai Bench issued orders for liquidation of the company on March 18, 2023.
The liquidation orders were challenged in the Supreme Court which granted a stay of the above orders on August 7, 2023.