Sterling Biotech’s liquidator invites fresh bids to attract more buyers

Interested parties can submit bids until November 5, the liquidator said last week. The e-auction is scheduled on December 10.

Fresh bids have been called to attract more buyers with a new clause that the successful bidder will now have to pay only 20% of the final consideration as upfront money at the time of issuance of the Letter of Intent (LoI). The remaining amount, i.e. 80% of the final consideration, will have to be paid in 90 days from the date of issuance of the LoI to the successful bidder.

“The revised terms will give more comfort to bidders. It gives them a window of 90 days from the issuance of letter of intent (LOI) for payment of 80% of balance consideration, which will also give them time and opportunity to seek clarity on reliefs and concessions from the adjudicating authority,” said Jyoti A Singh, founder of AJA Legal & Associates.

According to Nishit Dhruva, managing partner of law firm MDP & Partners, these clauses will help the winning bidder to approach the National Company Law Tribunal (NCLT) to get clean assets. “The tribunal can allow the winning bidder to get the company free from any past liabilities,” said Dhruva.

Earlier, bids were invited on July 21 for the world’s sixth-largest manufacturer of pharmaceutical gelatin to sell the company as a going concern. During the earlier bidding process,

, , UPL, ACG Associated Capsules and Gland Celsus Bio Chemicals made the shortlist.

The company, promoted by Chetan and Nitin Sandesara, was admitted for liquidation on May 8, 2019.

Mamta Binani, the liquidator for Sterling Biotech, and her associate Lovkesh Batra declined to comment.

It operates two manufacturing facilities in Vadodara, Karakhadi and Masar in Gujarat and one in Ooty in Tamil Nadu. Its consolidated revenue for FY20 and FY 21 were Rs 345.69 crore and Rs 347.44 crore, respectively.

“The bidder will get time to pay the consideration but reliefs/concessions will be determined/approved by the Adjudicating Authority and hence, the Bidder will need to take a business call on how relevant the reliefs/concessions are for the purpose of acquisition of the Corporate Debtor,” said Uday Ved, partner at the global tax practice group KNAV.

Promoters Chetan and Nitin Sandesara have fled India and are believed to be in Africa. Last year in June, the Enforcement Directorate had attached properties of over Rs 9,700 crore owned by Sandesaras.

The group and its subsidiaries, Sterling SEZ and Sterling International, collectively owe Rs 15,000 crore to financial and operational creditors.