Gujarat-based Meghmani Organics’s resolution plan for Kilburn Chemicals has been approved by the National Company Law Tribunal, Calcutta.

BSE-listed Meghmani has proposed to pay 61.32 per cent of the outstanding admitted claims of secured financial creditors, Bank of Baroda and State Bank of India, making it one of the rare bankruptcy cases where the lenders managed to salvage the majority of their loan exposure.

Kilburn, which is also listed on the BSE, has its registered office in Calcutta even as the company’s plant is located in Dahej, Gujarat. The plant, having annual capacity of 15,000 tonne, manufactures titanium dioxide which finds use in pigment. Meghmani also specialises in pigments, apart from agrochemicals.

Since October, 2018, the company could not operate the plant because of liquidity problems. BoB took the company to the NCLT and the corporate insolvency resolution process was initiated on August 10, 2020.

Once part of Williamson Magor Group under late Brij Mohan Khaitan, the character of Kilburn changed in the first decade of the century. Deepak Khaitan, the elder son of BM Khaitan, stepped down from the board and the shareholding of the group, which stood at 11.50 per cent as on September 30, 2021, was reclassified as non-promoter public shareholders.

The company was managed by Sandip Kumar Jalan, who was married to B.M. Khaitan’s daughter, and his family. S.K. Jalan was the managing director of Kilburn Chemicals till the time of his untimely death on July 15, 2020 from Covid-linked illness. Jalan and his family was the identified promoter group of Kilburn.

Following the acquisition of the company, Meghmani plans to delist Kilburn Chemicals from the bourses, extinguish the existing shares before putting fresh money into the revival of the company. In the end, Meghmani Organics, which has a market cap of close to Rs 3,000 crore, will be the sole shareholder of the company.

The total value of the resolution plan is Rs 130.21 crore, the court order showed. The financial creditors, who formed the committee of creditors, received Rs 128.51 crore out of their total Rs 209.58 crore of admitted claim.

The plan put forward by Meghmani received 100 per cent support from the CoC. While six companies had initially showed interest, four resolution plans were considered before selecting the successful one.

During the court proceedings, Rishav Banerjee appeared on behalf of the resolution professional, Joy Saha on behalf of Meghmani and Ratnanko Banerjee for the CoC.