The company is under corporate insolvency resolution process as per orders passed by Allahabad bench of the National Company Law Tribunal. Its request for raising funds was rejected by lenders.
Mumbai : LML Ltd has suspended operations at its plants and laid off a part of its workforce after the company’s proposal to raise 100 million rupees was rejected by a committee of creditors, the two-wheeler and three-wheeler maker said in a filing to exchanges. According to the provisions of Insolvency and Bankruptcy Code, 2016, a company under insolvency process can raise interim finance only after 75% members of the committee of creditors approve the resolution. The company is under corporate insolvency resolution process as per orders passed by Allahabad bench of the National Company Law Tribunal.
The company said it had to lay off a part of its workforce as it could not maintain its operations due to lack of funds. The company’s proposal to raise funds was approved by State Bank of India, IFCI Ltd, and Reliable Motors, which comprised 40.66% of the committee. IDBI Bank, Bank of India, Bank of Baroda, ICICI Bank, Edelweiss Asset Reconstruction Company, Phoenix Asset Reconstruction Company, forming 51.09% of the committee, rejected the proposal. Corporation Bank, which formed 8.25% of the committee, abstained from voting. “…since resolution was not approved by a minimum of 75% (by value) by member of CoC (committee of creditors), interim finance required by the corporate debtor (LML Ltd) could not be raised. Consequently, the operations of the company are being temporarily suspended with immediate effect,” the Kanpur-based company said in a notice to the exchanges.
