NCLT approves merger plan of Indian aluminium alloy wheel maker SCL with SDAL under IBC

In a first-ever move under the Insolvency and Bankruptcy Code (IBC), 2016, the Hyderabad bench of the National Company Law Tribunal (NCLT), India, has approved an insolvency resolution plan for Synergies Dooray Automotive Limited (SDAL), an aluminium alloy wheel supplier to global auto manufacturers such as Ford.

As part of the plan, Vishakhapatnam-based aluminium alloy wheel manufacturer Synergies Castings Limited (SCL), an SDAL subsidiary will merge with its holding company in an amalgamation scheme.

Incorporated in 1995, SDAL had been engaged in aluminium alloy wheel manufacturing until it stopped operations on grounds of insolvency. The approved IR plan was prepared the company’s IR professional Mamta Binani.

The plan will be funded through operations and against receivables from corporate debtors. All the payments will be made over a period of six years, NCLT order stated.

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"The resolution plan also envisages for insolvency resolution of SDAL and ensure continuity of business along with most effective use of the assets and equipments of SDAL and the amalgamation of the corporate debtor with the resolution applicant will bring in the number of operating and financial synergies, since both the companies relates to aluminium alloy wheel manufacturing industry .." NCLT Hyderabad bench said in its orders.