Tikona Infinet Clears CCD Dues With L&T Finance; Withdrawal Of Insolvency Plea At NCLT Underway
Tikona Infinet Clears CCD Dues With L&T Finance; Withdrawal Of Insolvency Plea At NCLT Underway
The matter reached the tribunal alleging a Rs.116.01 crore default
Mumbai-based broadband services provider, Tikona Infinet Pvt Ltd, has settled its dues of Series 'E' Compulsorily Convertible Debentures (CCDs) with L&T Finance Ltd, resulting in the closure of insolvency proceedings against it.
The company stated that the formal withdrawal of the insolvency petition from the Mumbai bench of the National Company Law Tribunal (NCLT) was underway.
Prakash Bajpai, the founder and chief executive of Tikona Infinet, stated, “It was a dispute amongst the shareholders about Coupon Rights. A settlement agreement has been executed, which will settle all disputes amicably between L&T Finance and other shareholders. A withdrawal application to NCLT is in process.”
The NCLT admitted Tikona under the Corporate Insolvency Resolution Process (CIRP) on a plea by L&T Finance.
The tribunal observed that even though certain CCDs were structured for conversion into equity, they could be considered financial debt if the coupon payment obligation was absolute.
L&T Finance had approached the NCLT alleging a Rs.116.01 crore default in unpaid coupon payments on CCDs by the company.
However, Tikona maintained that the instruments were classified as equity securities and did not qualify as financial debt under the Insolvency and Bankruptcy Code (IBC). The alleged coupon entitlements were subject to the availability of distributable cash and were like dividends, not debt.
On the other hand, L&T Finance submitted that the broadband internet provider defaulted on its dues in August 2024. The company failed to honor the coupon payments on CCDs held by the petitioner.
Senior Counsel Mustafa Doctor and Murtaza Kachwalla of Argus Partners appeared for L&T Finance.
Tikona Infinet was represented by advocate Shyam Kapadia and Munaf Virjee of AMR Law.
