The Kolkata bench of the National Company Law Tribunal (NCLT) has reserved the order for winding up the Kolkata-based railway PSU Burn Standard, although it has announced an insolvency resolution package of Rs 417 crore to pay back creditors, suppliers and provide VRS to odd 500 employees. Sources said it was clear from the announcement of the package that the NCLT would order the final winding up of Burn Standard soon after the Cabinet Committee on Economic Affairs cleared the railway ministry’s budgeted sanction of Rs 417 crore for the company. The railways made the sanction keeping the winding up petition in view. Sources said the NCLT is supposed to reserve its order till the CCEA doesn’t give its clearance.
Burn Standard reported net sales of Rs 197 crore for the first nine months and made 680 wagons and repaired 3,700 wagons till December 2017 until the company got an extension for insolvency resolution failing to submit a revival road map within the first 180 days. The company was referred to the NCLT on June 2017 and the first 180 days ended on November 27. Earlier a BIFR company, Burn Standard came out of it in 2010 with its negative net worth reworked with a revival package of Rs 1, 199 crore, including a Rs 1,149-crore government loan waiver, Rs 30 crore for refurbishment and Rs 20 crore for paying out statutory dues. Its current debt stands at Rs 285 crore, including Rs 62 crore dues to operational creditors. On account of salaries and wages, dues are Rs 132 crore.
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