Ballarpur Industries – Corporate Insolvency Resolution Process (CIRP)

The above shareholding pattern refers to a plan to change the ownership structure of a corporate debtor, which involves several steps. Here’s a detailed explanation of the steps involved:

i. The first step is to extinguish the existing equity shares of the corporate debtor held by the promoters or promoter group. This means that the shares held by them will no longer be valid, and their ownership rights will be revoked. Additionally, the shares held by other individuals or entities, excluding the promoters or promoter group, will be written down. This means that the value of their shares will be reduced such that their existing holding of Rs. 251.77 crores, which constitute 97.32% stake, will be reduced to Rs. 4.125 crores, which constitute 7.5% stake in the proposed shareholding pattern. This step is crucial in changing the ownership structure of the company.

ii. The second step involves the issuance of fresh equity shares by the corporate debtor. The company will issue new shares with a face value of Rs. 10 each, at par, which means that the shares will be issued at their face value without any premium. These new shares will be issued to the resolution applicant or its affiliates, as well as to the existing financial creditors, as envisaged in the resolution plan. The total value of the new shares to be issued will be Rs. 46.75 crores, which will be allocated to the resolution applicant or its affiliates, and Rs. 4.125 crores, which will be allocated to the existing financial creditors. This step will help to bring in new shareholders to the company and provide the required capital for its operations.

Overall, the above shareholding pattern aims to change the ownership structure of the company by extinguishing the existing shares held by the promoters or promoter group, reducing the value of the shares held by other individuals or entities, and issuing new shares to the resolution applicant or its affiliates and the existing financial creditors. This will help to inject fresh capital into the company and bring in new shareholders who can help to steer the company towards profitability and growth.