Four years after a court ordered the winding up of Vijay Mallya’s UB Engineering, its creditors have received about Rs 50 crore so far from the liquidation proceedings, according to sources close to the resolution process professional.
That is less than half of the company’s liquidation value of Rs 106 crore. UB Engineering, which counted Axis bank, YES bank, Corporation Bank, IDBI Bank and Laxmi Vilas Bank as some of its lenders, owed them over Rs 450 crore. The company, which was first sent to the insolvency court for resolution, was then forced to liquidate after it failed to find a buyer under the Insolvency and Bankruptcy Code.
Its liquidation proceedings have taken longer than usual due to a tax issue and the pandemic-induced lockdowns, the sources said.
“I think in infrastructure cases, especially in dormant companies, liquidation should not take more than one year’s time,” New Delhi-based insolvency professional Nilesh Sharma said, adding the liquidator could consider selling the company’s assets through auctions to hasten the process.
IBC’s last newsletter for the July-September quarter showed 39% of the liquidation cases have been going on for over two years and 29% have been going for 1-2 years.
“There were impediments like service tax liens not being lifted from property. Now that has been cleared. That is helping us finish the liquidation,” a source close to the liquidation proceedings said.
The source added that only the secured creditors of UB engineering would get their dues.
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