NCLT approves resolution plan for Prowess International
The National Company Law Tribunal has approved a resolution plan for Prowess International, a Jamshedpur-based service provider to the iron and steel sector, after the company cited rising cash flows and a swelling order book to demonstrate before the dedicated bankruptcy court its ability to repay loans. This is one of the rare examples of successful resolutions wherein a bankruptcy case filed by a trade creditor has not resulted in the liquidation of the company. The case was filed by the Navi Mumbai-based Parker Hannifin India.
Prakash Kumar, CEO of Prowess, submitted the plan. Punjab National Bank led the committee of creditors. Kolkata-based Arun Kumar Gupta was the insolvency resolution professional.
“The operational creditor and the PNB both look convinced about the resolution plan even though they may have to forgo some amount,” said an executive familiar with the matter.
The resolution plan presented by Prakash Kumar included documents to show the financial and operational strengths of the company, including confirmed orders worth Rs 29.47 crore and cash flow projections for the next six months.
The case was admitted for insolvency proceedings in April. Three years ago, the operational creditor supplied select manufacturing materials and raised a total bill of about Rs 74 lakh. Prowess paid about a third of the sum. Later in May, both parties wanted to withdraw the petition citing an amicable solution after the committee of creditors had held its first meeting. But the court declined to accept this interim solution.