The process for liquidation of assets of Moser Baer Solar has been initiated, and the stakeholders of the company have been asked by the National Company Law Tribunal (NCLT) to submit their claims with proof on or before July 1, 2019, to the liquidator.
The process of liquidation has been initiated in the absence of any buyers for Moser Baer Solar.
According to the concept of ‘Corporate Insolvency Resolution’ plan, the insolvency can be initiated by the creditor and once initiated, the control of the company goes into the hands of an insolvency resolution professional. The professional makes a resolution plan in which the claims of the creditors are addressed, and the maximum value is sought, generally by selling the company.
In Moser Baer Solar’s case, the resolution plan has failed since there were no buyers ready to acquire the company. If the resolution plan fails, the company goes into liquidation. This implies that all the assets of the company will be sold, and the claims of the creditors will be satisfied to the extent of the realized value. It would have been better for the creditors if the resolution plan had worked out since it would have fetched them better returns when compared to liquidation.
The process for insolvency had been initiated in 2018. A period of 270 days ending October 2018 was provided to find a suitable buyer for Moser Baer Solar.
Currently, other than the big players, module manufacturers in India are yet to come to terms with the volatility and dynamics of this market with the plummeting solar power tariffs. Only a few players have the required resources to keep their module production lines functioning by developing their projects when there is a lull in demand.
However, in Moser Baer Solar’s case, its parent company, Moser Baer (sale notice was issued for it in March 2019), was not in excellent financial shape, pushing the company towards insolvency.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.