Fate of 2,280 workers hangs in balance as NCLT liquidates Moser Baer

There is still some hope for 2,280 workers of Moser Baer India Limited, who have been rendered jobless following the National Companies Law Tribunal's (NCLT's) order to send the company for liquidation.

Anil Kohli, the liquidator appointed by the committee of creditors (CoC), told  Business Today that the efforts are on to liquidate the company. He says that some firms have shown interest in buying the company as a going concern as it has two state-of-the-art plants in Noida and Greater Noida.

The company failed to attract any bidders for its business under the Insolvency and Bankruptcy Code (IBC) within the stipulated 270 days. Kohli says that initially companies like Sony and Dixon had shown interest in bidding for the company during the resolution process, but they opted out due to labour unrest.

The workers were agitating outside the factory preventing anyone from entering it unless their dues were paid.

At the time of admission of insolvency application against Moser Baer by financial creditor Alchemist Asset Reconstruction Company in November last year, two months of salaries of workers, amounting Rs 15-16 crore were due.

Later, the workers called off their agitation after it was promised to them that they would be paid 9-month salary totaling Rs 80 crore.

The liquidator, Anil Kohli, said that this was possible only because they could include this in the resolution cost, which means the committee of creditors would bear this cost.

"With the workers agitation over, some companies have now shown interest in buying it as going concern," says Kohli.

Under the IBC, if no resolution plans by parties interested in buying a corporate loan defaulter is approved by the two-third of the committee of creditors by value, the defaulting company goes for liquidation.

Earlier, the law allowed a liquidator to sell an asset on a standalone basis or sell a set of assets collectively or in parcels in a slump sale. But now the law has been amended to allow the liquidator to sell a company as a going concern.

The liquidation value of Moser Baer is Rs 334 crore, while the fair market value is Rs 772 crore against a total creditors' claim of Rs 4,828 crore.

Moser Baer, promoted by Deepak Puri and Neeta Puri, is the 200th corporate debtor to be liquidated under the IBC.