Bankruptcy court temporarily halts Gujarat-based Sterling Biotech auction
The NCLT was hearing a petition filed by one of the successful qualified bidders from Sterling Biotech, India Gelatin and Chemicals Ltd.
Gujarat-based Sterling Biotech is the world’s sixth-largest maker of pharmaceutical gelatin and owes over Rs 8,100 crore to financial and operational creditors.
Pursuant to the NCLT order, the lease of a parcel of land of approximately 107 acres, which forms part of the Company’s estate, was canceled by the Collector on December 13, 2021.
“In view of the fact that the assets of the debtor company (Sterling Biotech) are not perishable, no damage or prejudice will be caused to the respondent (liquidator) with regard to the auction, even if it is postponed. for a short time. time,â the NCLT bench headed by Judge Pradeep Deshmukh said in its Jan. 31 order.
NCLT will hear the case on February 16.
This lease was originally granted by another Sterling SEZ group company to Sterling Biotech, which was later canceled by the former company. Sterling Biotech’s plea challenging this termination by Sterling SEZ is also pending before the NCLT. Later, the collector of Gujarat canceled the lease on the same plot of land.
Admittedly, Sterling SEZ is a separate entity from the group and the court also ordered the company to be liquidated on October 18, 2021.
Now, India Gelatine and Chemicals has sought court intervention to get more clarity on the matter.
The liquidator’s lawyers informed the court that the company is being sold as a going concern and that all bidders have been informed of the latest developments regarding the termination of the lease and other matters.
Currently, India Gelatine and Chemicals, in a consortium with Shamrock Pharmachemi Pvt Ltd, is among five qualified bidders to participate in a Sterling Biotech auction. Other bidders include US startup Perfect Day Inc, Belgian company Tessenderlo Chemie International NV, ACG Associated Capsules and Progressive Star Finance Pvt Ltd.
The liquidator has set a reserve price of Rs 548.46 crore for the company.
Mamta Binani, the liquidator of Sterling Biotech, and her partner Lovkesh Batra declined to comment as the matter is pending bankruptcy cost.
âIt is essential that the auction takes place within the stipulated time to maintain the interest of the bidders, and also that the lease in question is not terminated, as this would diminish the value of the assets of the debtor company, which are a essential component of assets,â said Sonam Chandwani, Managing Partner, KS Legal.
The group and its subsidiaries, Sterling SEZ and Sterling International, collectively owe Rs 15,000 crore to financial and operational creditors.