Finquest to take over Digjam Ltd, its liabilities

NCLT bench had begun insolvency proceedings after firm failed to pay dues; move to save 650 jobs

Ahmedabad bench of National Company Law Tribunal (NCLT) has approved the insolvency resolution process of Jamnagar-based textile manufacturer Digjam Ltd by approving a takeover bid of one of the two companies that showed interest.

The move is likely to save 650 jobs at the beleaguered company owned by Kolkata-based S K Birla Group.

An insolvency and bankruptcy proceedings were initiated against Digjam by Oman Inc after the former failed to pay off debt. The private company filed a petition in 2018 and NCLT admitted it in April 2019. The court then appointed chartered accountant Sunil Agrawal as the Resolution Professional to commence insolvency resolution process (IRP) and to chalk out a scheme to repay the debt of the company.

A public announcement was made to invite claims from various stakeholders and creditors and later a Committee of Creditors (CoC) was appointed in November last year. CoC received claims of Rs 264.02 crore rupees and out of which claims worth Rs 141.76 crore were. PSU banks UCO and SBI had made claims of Rs 70 crore apart from other creditors and employees.

Meanwhile, Finquest Financial Solution Private Limited, an NBFC, and Donear Industries Limited submitted their resolution plan to take over the company.

After discussions and negotiation, the resolution plan of Finquest was accepted and it will now take over the company. “The resolution plan has been accepted and the company as well its 650 workmen’s jobs have been saved. Debt of banks and other creditors will also be taken care of by the new management,” said Agrawal. He said, “It is a rare development that a company has been saved from going into liquidation. The resolution plan shall come into force with immediate effect.”