Resolution plan for Television Home Shopping Network approved by NCLT

17 Nov 2023 , 03:23 AM

A joint proposal for the purchase of the bankrupt Television Home Shopping Network, made by financial services company Khandwala Finstock and bag manufacturer Goblin India, has been authorized by the National Company Law Tribunal (NCLT).

The plan calls for Khandwala Finstock to merge—or reverse merge—with the business that runs TV home shopping channels. At a meeting on August 6, every member of the company’s committee of creditors accepted the plan.

According to attorney Nausher Kohli, who represented the successful bidders in the case, the joint resolution plan calls for upfront payments to secured financial and operational creditors of Rs 19.65 lakh and Rs 35.34 lakh, respectively, within 25 days of the NCLT’s approval.

A portion of 1,60,000,000 partly paid (Rs 5) non-cumulative, non-participating, redeemable preference shares, each with a face value of Rs 10, are also available to each operational creditor at 6%. These shares can be redeemed after 15 years from the date of complete payment up.

It is suggested that the partially paid preference shares be distributed in accordance with the acknowledged claims that are still outstanding following the initial cash payment.

TV Home Shopping Network, formerly known as TV18 Home Shopping Network, runs an online storefront called HomeShop18 in addition to TV home shopping channels.

TV18 Home Shopping Network’s owner, Network18, sold a majority share of HomeShop18 to real estate company Skyblue Buildwell in 2019.

The tribunal stated that it is not appropriate to interpret Television Home Shopping Network’s approval of the settlement plan as a release from any of its legal duties.

A total of Rs 397 crore worth of claims had been made against the business. Claims of Rs 16.56 crore had been accepted out of this. While operational creditors (government dues) totaled approximately Rs 377 crore, secured finance creditors had claimed dues of Rs 19.65 crore.

Siti Networks, a cable TV distribution company, filed an action for corporate bankruptcy resolution against the corporation, claiming dues of Rs 43.68 lakh plus an 18% interest.

On March 3rd of this year, the NCLT granted Siti’s petition. On May 12, the tribunal also accepted Treasure Retail’s suit against the corporation, alleging dues of Rs 1.38 crore.

The most recent NCLT order was issued in response to an application submitted on August 4 by Globlin India and Khandwala Finstock, the company’s resolution expert, Darshan Patel, asking for approval of the single resolution plan.

In order to get the reliefs, waivers, concessions, and approvals requested in the resolution plan, the NCLT has instructed Goblin and Khandwala Finstock to independently approach the relevant forums.

Claims that were excluded from the resolution plan will be deemed null and void, according to the tribunal.

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