Hyderabad: Sterling Biotech Limited was acquired by US-based Perfect Day, Inc. through a liquidation process on November 17, with the approval of National Company Law Tribunal, Mumbai (NCLT).
The corporate insolvency resolution process (CIRP) of SBL under the IBC was
initiated by an application filed by Union Bank of India (earlier Andhra
Bank) back in June, 2018. Although the committee of creditors received
certain resolution plans, none of them were approved by it and the CIRP for
SBL failed.
Subsequently, NCLT ordered liquidation of SBL on a going concern basis
through the liquidation process under IBC and appointed the liquidator in
May, 2019. The order initiating the liquidation process was subject to
judicial challenges before the National Company Law Appellate Tribunal and
the Supreme Court, and the liquidation order was finally upheld by the apex
court in February, 2021. Thereafter, the liquidator initiated the
liquidation process and issued the process document and public notice in
October, 2021 for inviting bids for acquisition of SBL as a whole on a going
concern basis. Once the bids were invited by way of auction by the
liquidator, Perfect Day emerged as the highest bidder and was declared the
successful bidder in April. Perfect Day then approached NCLT on May 28 this
year for approving its acquisition and for grant of certain reliefs and its
plea to treat the acquisition akin to a resolution process under CIRP,
especially since the liquidation was of the entire company, i.e. SBL on a
going concern basis and not a piece-meal asset sale. NCLT, on November 11,
in a landmark order, approved the acquisition of SBL by Perfect Day in
accordance with the acquisition plan submitted by Perfect Day and allowed
the reliefs which included cancellation and extinguishing the existing share
capital and acquisition of SBL on a clean slate basis akin to a resolution
process.
The acquisition through the liquidation process has enabled preservation of
the value of the assets and business operations of SBL and benefitted
various employees and labourers, as it was undertaken on a going concern
basis.
