MUMBAI: Nasdaq-listed Ebix is set to acquire debt-laden Educomp Solutions as most lenders have accepted the resolution plan that now awaits the approval of the National Company Law Tribunal, said two people with direct knowledge of the matter.
The company, which was under insolvency proceedings for defaulting on Rs 3,000 crore of loans, will now be revived with the new management bringing in about Rs 400 crore upfront.
NCLT’s Delhi principal bench will hear the matter on April 4.
Mahender Kumar Khandelwal, the resolution professional, confirmed the matter but declined to divulge further details. “The resolution plan has now been referred to NCLT,” he said.
Out of Rs 400 crore, financial creditors will be paid upfront Rs 310 crore, meaning that they will have to waive off about 90% of their unpaid loans. “The new management will use about Rs 75 crore to revive the company while some money will be spent for employee dues,” said an executive familiar with the matter.
Ebix and Luxembourg-based Boundary Holding were the two shortlisted entities, which submitted binding bids or commitments that could not be withdrawn, to buy the company. Finally, bankers chose to go with the Ebix plan.
But there was a twist in the voting as the first round suffered from a technical glitch, resulting in less than 75% of the creditors favouring the Ebix bid. Any committee of creditors needs three-fourths majority to approve any binding bid.
Some of the financial creditors to the company include IDBI Bank, Axis Bank, State Bank of India, International Finance Corporation (IFC), and ICICI Bank, show data on the company’s Web site. Emails sent to select lenders and the company remained unanswered until the publication of this report. Axis Bank declined to comment.
IDBI Bank has the largest voting share at 17.30% in the committee of creditors, with Rs 523 crore in unpaid loans. There are a total of 23 financial creditors.
About five entities expressed their interest to bid for the company. In January, ET reported that FIITJEE and ExtraMarks did not submit offers after their plea for a two-week extension to evaluate the company was dismissed by the NCLT.
Educomp, promoted by Shantanu Prakash, filed for insolvency proceedings in May last year as it defaulted on loan repayments.
Educomp is engaged in K12 (kindergarten to Class 12) content library with 3D multimedia educational content. It has 350 pre-schools under the name Little Millennium, 45 K12 schools and 63 test prep centres.