Mumbai, October 22: The National Company Law Tribunal (NCLT) has approved a ₹577.24-crore resolution plan for Mumbai-based pharmaceutical company Arch Pharmalabs Ltd, submitted by a consortium of entrepreneur Ashish Kumar and Hyderabad-based MetaX Life Sciences Ltd, clearing the way for the company’s revival.
In its October 15 order, the NCLT Bench-II, comprising judicial member Ashish Kalia and technical member Anil Raj Chellan, approved the plan under the Insolvency and Bankruptcy Code (IBC), observing that it complied with statutory requirements and contained provisions for effective implementation.
Resolution Plan Includes CIRP Costs
“The Successful Resolution Applicants (SRA) has stated that the total amount of the Resolution Plan is Rs.577,24,30,812/- which comprise of the discharge amount of Rs.567,49,13,582/- along with the amount of Rs. 9,75,17,230/- as CIRP costs.
“It was stated that the Discharge Amount is exclusive of the payment to be made towards CIRP Costs which will be paid by the SRA at actuals. Further, an amount towards regulatory fee as payable to IBBI under Regulation 31A of the CIRP regulations (to the extent of such fees not covered under the CIRP Costs) shall be payable by the SRA. Such payment will form part of the CIRP Costs,” reads the summary of the resolution plan approved by the Committee of Creditors (CoC).
The resolution applicants have proposed to complete the payments within 75 days of the plan’s approval. The plan also provides for payments towards operational creditors, employees and statutory dues.
Company Admitted To Insolvency Process In 2024
Arch Pharmalabs was admitted into the corporate insolvency resolution process (CIRP) on May 15, 2024, following a petition filed by ICICI Bank Ltd.
The company, incorporated in 1993, manufactures active pharmaceutical ingredients (APIs) and has six plants across the country, besides properties in Maharashtra and Gujarat.
₹50 Crore Equity Infusion Planned
The resolution plan provides for ₹2 crore towards full and final settlement of workmen’s and employees’ claims, along with specified payments towards provident fund, employee state insurance and other government dues.
It also provides for an infusion of ₹50 crore into the company through the subscription of fresh equity shares.
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NCLT Finds Plan Compliant With IBC
The tribunal held that the plan met the requirements of the Insolvency and Bankruptcy Code and did not contravene Section 29A, which prescribes eligibility criteria for resolution applicants.
Accordingly, it approved the plan under Section 31(1) of the Code, clearing the way for the company’s proposed revival under the new ownership.
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