INSCO Completes HNG Buy with ₹1,851 Crore Payout

Independent Sugar Corporation (INSCO), which is part of the Madhvani Group based in Uganda, has successfully acquired Hindusthan National Glass (HNG), the largest manufacturer of glass bottles in India, thereby concluding a protracted bankruptcy process that began four years ago.

INSCO has disbursed ₹1,851 crore to creditors and has also provided a 5% equity stake, thereby finalizing the resolution process. "The resolution plan was executed last month, and the funds have been transferred. This brings significant relief to creditors, as this account was mired in numerous litigations and had been prolonged for many years," stated an individual familiar with the situation. The State Bank of India (SBI) stands as the largest creditor, holding 38% of the ₹3,786 crore in admitted claims.

SBI is expected to recover approximately ₹703 crore. The bank did not respond to an email requesting comments. Additionally, creditors will benefit from the 5% equity stake provided by INSCO. In total, INSCO's proposal anticipates a 49% recovery for creditors based on the total admitted claims, excluding the value of the equity stake.

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The overall value of the resolution plan is projected to be ₹2,207 crore, which includes the equity stake and ₹356 crore that is promised to be paid to creditors from HNG's future cash flows, raising the recovery percentage to 58%. HNG was declared bankrupt in October 2021.

After more than a year, the committee of creditors (CoC) approved the resolution plan proposed by AGI Greenpac, which was subsequently contested by INSCO. INSCO appealed against the National Company Law Appellate Tribunal (NCLAT) ruling from September 2023 that upheld AGI Greenpac's takeover plan for HNG, arguing that while the approval from the Competition Commission of India (CCI) was essential, its prior approval by the CoC was merely directory.