Tractors India: Crane manufacturer Tractors India towed to NCLT

The Bank of India has launched bankruptcy proceedings against Kolkata-based commercial equipment maker TIL (Tractors India) to recover its fees as previous collection efforts have failed, people familiar with the process said.

Five banks, including BoI, have total claims of ₹600 crore on the company, which banks have classified as a distressed asset. “The case has been submitted to the NCLT pending approval. There was no other way as the company is bleeding and there is no solution in sight,” said a person with knowledge of the process.

The promoter had proposed a restructuring of 10-year loans, which the banks did not like. The lenders have therefore opted for court-supervised insolvency proceedings.

TIL is a manufacturer of cranes, trucks and container handlers and the company was founded before independence.

Its results show that it has been losing for more than a year. At the end of September 2022, the company reported a loss of £21 million, mainly due to falling revenue. Total revenue fell from £17m at the end of September 2022 to just £4m a year ago, indicating the challenges it is facing. In their report accompanying the results, auditors Singhi & Co stated that the company’s net assets are negative and its current liabilities exceed its current assets as of September 30, 2022.

“The Company is considering a strategic investment by issuing preferred shares to Indocrest Defense Solutions Pvt Ltd under the terms of Regulation 164A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, subject to shareholder approval. .. The Board of Directors … passed a corresponding resolution at its meeting on November 26, 2022 and also informed the stock exchanges,” said the auditors.

Lenders are also open to finding a buyer outside of the bankruptcy process and settling the account through a one-off agreement given bankruptcy court delays, said a second person with knowledge of the process. TIL has objected to BoI’s NCLT objection. The auditors said that although the company’s financial condition raises doubts about the company’s ability to continue as a going concern, management is confident that the proposed strategic investments and existing sales orders will alleviate the uncertainties.

Non-bank lenders Tata Capital Financial Services and Aditya Birla Finance have also initiated SARFAESI procedures to collect fees.

Sybil Alvarez

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