NCLT Ahmedabad directs meetings on Essar Power–Abhinand Ventures demerger and capital reduction scheme

NCLT admits scheme involving brand demerger and CCPS capital reduction

The Ahmedabad Bench of the National Company Law Tribunal has admitted a joint company application filed by Abhinand Ventures Private Limited and Essar Power Limited under Sections 230 to 232 read with Section 66 of the Companies Act, 2013, seeking directions in relation to a composite scheme of arrangement. The Division Bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma passed the order on January 28, 2026.

The proposed scheme provides for the demerger of the ‘Brand Undertaking’ of Abhinand Ventures into Essar Power on a going concern basis, along with reduction of Essar Power’s 0.01% compulsorily convertible cumulative preference shares (CCPS) and reorganisation of its reserves. The Tribunal accepted the appointed date of April 1, 2025, holding that a retrospective date aligned with the financial year did not prejudice stakeholders and was permissible under Section 232(6). It was also noted that no insolvency proceedings were pending against either company.

Meetings directed; some classes granted dispensation

After examining the shareholding and creditor structure, the NCLT dispensed with meetings of equity shareholders and optionally convertible debenture holders of Abhinand Ventures, as well as preference shareholders of Essar Power, in view of written consents placed on record. However, the Tribunal directed that meetings of non-convertible debenture holders and unsecured creditors of Abhinand Ventures, and meetings of equity shareholders, non-convertible debenture holders, and unsecured creditors of Essar Power, be convened on March 14, 2026, either physically or through video conferencing.

The Bench appointed an advocate as chairperson and a company secretary as scrutiniser to oversee the meetings and directed statutory notices and advertisements in accordance with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Regulatory authorities including the Registrar of Companies, Regional Director and Income Tax Department were also directed to be notified under Section 230(5). The application was accordingly allowed, paving the way for stakeholder consideration of the scheme.