NCLT approves Sterling Biotech’s acquisition by US-based Perfect Day, Legal News, ET LegalWorld – Legal Firms


India’s bankruptcy court has approved US-based food technology startup Perfect Day’s acquisition of Sterling Biotech under the Insolvency & Bankruptcy Code (IBC).

In April, the California-based company emerged successful with a bid of Rs 638 crore against the reserve price of Rs 548.46 crore for the debt-ridden company, which owes over Rs 8,100 crore to lenders.

“We allow the cancellation and extinguishment of existing share capital of the corporate debtor, (Sterling Biotech), issuance and allotment of shares to the Acquirers and filing intimation to the stock exchange and other government authorities,” the Mumbai-bench of the National Company Law Tribunal (NCLT) said in an order dated November 11.

It further observed that “upon payment of the final consideration, the acquirers shall be deemed to have been granted all the rights, title and interest in the whole and every part of the corporate debtor…”

Perfect Day has already paid over Rs 127 crore, or 20% of the final price consideration. The US startup will, as per the order, directly acquire 73.9% of the share capital of Sterling Biotech, while the rest will be acquired by Perrya LLC of Delaware, USA.

The Indian consortium of Shamrock Pharmachemi Pvt Ltd and India Gelatine & Chemicals Ltd; Belgian firm Tessenderlo Chemie International NV, ACG Associated Capsules, an integrated pharmaceutical manufacturing solutions company, and Progressive Star Finance Pvt Ltd, were the other shortlisted bidders.

However, only Perfect Day and ACG Associated Capsules participated in the active bidding.

Mamta Binani, the liquidator for Sterling Biotech, and her associate Lovkesh Batra refused to comment. Perfect Day did not respond to ET’s email till press time Sunday.

Sterling Biotech operates two manufacturing facilities in Gujarat and one in Tamil Nadu.

The Mumbai bench of the NCLT had admitted the Chetan and Nitin Sandesara-promoted company under the corporate insolvency resolution process (CIRP) after state-owned Andhra Bank (now Union Bank of India) filed a petition on June 11, 2018.

The following year, in May, the tribunal ordered the liquidation of the company as a going concern after it failed to receive any viable resolution plan.

“This development will pave the way to save many companies even after lenders fail to receive any viable resolution plans for companies that may have the potential to revive,” said Nishit Dhruva, managing partner of law firm MDP & Partners, who appeared for the lender in the case.

Founded in 2014 by Ryan Pandya and Perumal Gandhi, Perfect Day raised $350 million in September at a valuation of about $1.5 billion. The startup, a manufacturer of animal-free dairy proteins, has so far secured $750 million in funding. It counts actor Leonardo Di Caprio as one of its advisors.


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