Madras HC admits winding up plea against Subhiksha

The Madras High Court has admitted a winding up plea petition against Subhiksha, the beleaguered deep discount retail chain, filed by Kotak Mahindra Bank.

While admitting the petition, Justice P Jothimani passed orders for publication of advertisement in national dailies by Kotak Mahindra Bank. The advertisement will seek objections, if any, from stakeholders about the closure of the company.

The retailer owes Kotak around Rs 40 crore. The case will come put for Next hearing on September 22.

The court also dismissed an arrangement that Subhiksha had proposed with its creditors, which entailed a compromise formula that lends through principal and interest waivers.

However, the High Court deferred the appointment of a provisional liquidator.

According to the Kodak Mahendra’s petition, Subhiksha owes more than Rs 800 crore to a consortium of 13 banks. The retailer knocked the doors of the corporate debt restructuring (CDR) cell to reschedule loans. The deadline for the CDR process to end was July 31 and since the lenders could not arrive at a consensus, the company filed a petition in the High Court under Section 391 of the Companies Act, which vests power in the company to make arrangements with the creditors.

Kodak Mahendra sought the court to order winding up of Subhiksha.