The National Company Law Appellate Tribunal (NCLAT) is set to address significant challenges to the resolution plan of Birla Tyres in the coming week. HDFC Bank’s plea, challenging the joint resolution plan proposed by Himadri Speciality Chemical Ltd and the Dalmia Bharat group for acquiring Birla Tyres, will be heard on November 23. Additionally, Kesoram Industries Ltd, the parent company of Birla Tyres, contests the rejection of its claims as a financial creditor and will be heard on November 24.
The resolution plan, approved by the Kolkata bench of the National Company Law Tribunal (NCLT) last month, raised concerns as uncertainties persist regarding the business revival of Birla Tyres post-acquisition by Dalmia Bharat Group. Workers face an uncertain future due to the alleged unilateral rejection of their claims in the approved resolution plan, prompting legal action in various forums.
The complexity deepens as workers’ dues, prioritized under the Insolvency and Bankruptcy Code (IBC) waterfall mechanism, may impact acquisition costs for Dalmia Bharat Group. Challengers argue that the resolution plan lacks feasibility and viability, emphasizing the need to protect workers’ interests. Despite these contentions, NCLT approved the plan, dismissing claims that the successful bidders are disinterested in managing the business.
Following NCLT’s approval, the consortium took possession of Birla Tyres’ assets in Odisha. The resolution plan’s implementation led to the delisting of Birla Tyres’ shares from stock exchanges. Established in 1991 and separated from Kesoram Industries in 2019, the fate of Birla Tyres remains a focal point in the evolving landscape of insolvency resolution.
