This clarification is for the Financial Creditors of Pancard Clubs Limited (“the Company”) and in furtherance of the email dated 4th June, 2024 addressed by the erstwhile Resolution Professional Mr. Rajesh Sureshchandra Sheth to the Financial Creditors.
The Company was undergoing corporate insolvency resolution process (“CIRP”) vide Hon’ble NCLT’s Order dated 9th September, 2022. During the CIRP, various creditors had submitted their respective claims (including the financial creditors) which after verification stood admitted by the Resolution Professional. Subsequently, the Resolution Plan submitted by the Successful Resolution Applicant was approved by the Hon’ble NCLT vide its Order dated 25th April, 2024, which we understand was duly communicated to all the Creditors by the erstwhile Resolution Professional. The Resolution Plan so approved by Hon’ble NCLT is binding on all the Stakeholders of the Company including the creditors.
As per the final list of Financial Creditors provided by the erstwhile Resolution Professional as on Plan Approval Date i.e. 25th April, 2024. Following is the summary of the claims of the financial creditors:
| Total Number of Claims | Amount Claimed | Total Number of Claims Admitted | Amount Admitted |
|---|---|---|---|
| 16,57,924 | ₹9200,05,31,204 | 14,06,735 | ₹8297,09,62,361 |
As per the terms of the approved Resolution Plan the settlement is being made to all the Creditors whose claim stood admitted by the Resolution Professional. The manner of settlement to the Financial Creditors as per the financial proposal in the approved resolution plan is explained below:
As per the approved Resolution Plan, the financial creditors are entitled to an upfront cash recovery of INR 15 Crores (Indian Rupees Fifteen Crores Only). Already been paid as a part of Implementation Process.
As per the approved Resolution Plan, a deferred consideration of INR 53.32 Crores (Indian Rupees Fifty Three Crores Thirty Two Lakhs Only) is payable to the financial creditors over a period of three years subject to adjustment of excess amount contributed by the Successful Resolution Applicant towards payment of Priority Dues. Accordingly, as informed to the representative of the financial creditors in the Second Meeting of Monitoring Committee, the excess amount of INR 20.34 Crores already paid by the Successful Resolution Applicant shall be adjusted and net INR 32.98 Crores (Indian Rupees Thirty Two Crores Ninety Eight Lakhs Only) shall be payable subject to further adjustment of the Standstill costs incurred / to be incurred by the Implementing Entity / Successful Resolution Applicant as per following schedule:
| S. No. | Deferred Consideration Proposed | Deferred Consideration Payable subject to adjustment | Schedule |
|---|---|---|---|
| 1. | ₹ 10.8 Crores | ₹ 10.80 Crores | at the end of 1st Year from the Transfer Date |
| 2. | ₹ 12.10 Crores | ₹ 12.10 Croress | at the end of 2nd year from the Transfer Date |
| 3. | ₹ 30.42 Crores | ₹ 10.08 Crores | at the end of 3rd Year from the Transfer Date |
As per the approved Resolution Plan, the Successful Resolution Applicant has estimated net cash and cash equivalents (including estimated net recovery from SEBI) of INR 140 Crores, of which 25% was supposed to be utilised towards Company’s business and balance 75% i.e. INR 105 Crores (Indian Rupees One Hundred and Five Crores Only) estimated to be available to be paid to the CoC as CoC Entitlement Amount. This amount is merely a non-binding estimation and may be subject to and contingent upon receipt of such amount from SEBI. It is abundantly clarified that the CoC Entitlement Amount mentioned in the Resolution Plan is based purely on an estimation of the amount of receipt from SEBI, is strictly on payable-when-available basis and shall not be a guaranteed or assured payment. Further, as informed to the representative of the financial creditors in the Second Meeting of Monitoring Committee, the calculation of CoC Entitlement amount eligible and available for distribution as on plan approval date i.e. 25th April, 2024 amounting to INR 11,35,591 was not sufficient to pay even the unpaid CIRP cost of Rs. 23,67,80,024, accordingly, there shall not be any amount available for distribution to the financial creditors out of the CoC Entitlement Amount.
As per the approved Resolution Plan, Financial Creditors shall be paid a sharing amount which shall be calculated at 30% of the surplus amount available upon recovery from receivables from all the assets of the Company during a period not exceeding 3 (three) years from the Transfer Dare, excluding the Pool A assets after deducting expenses/costs incurred on such recovery and a recovery charge of 5%. The net recovery estimated by the Successful Resolution Applicant in this regard is INR 1,740 Crore which is payable on when available basis. This amount is merely a non-binding estimation and may be subject to change on account of assets of the Company and the recovery of monies therefrom. It is abundantly clarified that the Sharing Amount mentioned in the Resolution Plan is based purely on an estimation of the amount of recovery, is strictly on payable-when-available basis and is not a guaranteed or assured payment.
In the event the CoC Entitlement Amount and the Sharing Amount as mentioned above in (iii) and (iv) do not become payable on account of not being recovered and received within a period of three years from the Transfer Date for any reason whatsoever, then a minimum committed payout of INR 200 Crores (Indian Rupees Two Hundred Crores) will be made at the end of the 3rd year from the Transfer Date.
The payment as laid out in Para above shall be paid out to the Financial Creditors against their admitted claims at the proposed intervals in proportion of their admitted Claims.
Moreover, please note that the in terms of the approved resolution plan, payment of the Upfront Cash Recovery shall be deemed a complete discharge of the obligations of the Successful Resolution Applicant and the Company in respect of the payments to be made to the Financial Creditors and the Company shall have no liability (whether disclosed or undisclosed) (except the payment of Deferred Consideration) towards any Financial Creditor relating to the period until the Transfer Date. Further, and all such claims shall immediately irrevocably and unconditionally stand extinguished vis-a-vis the Financial Creditors.
The disbursed amount to the respective financial creditors has been calculated using the following formula:
| A | Amount of admitted debt of the respective financial creditor | X |
|---|---|---|
| B | Total Amount proposed to be disbursed as per approved Resolution Plan | Y |
| C | Total Admitted Debt | 8297,09,62,361 |
| D | Recovery of Respective Financial Creditor [(A*B)/C] | [(X*Y) / 8297,09,62,361] |