Majestic Auto Ltd has settled its dispute over the SHPL Resolution Plan with ARC, NovumLake, and 360 ONE. The company committed ₹81.84 crore plus interest, pending Supreme Court approval.
Majestic Auto Ltd Finalizes SHPL Resolution Plan Settlement
Majestic Auto Ltd has committed to payments totaling ₹81.84 crore plus an additional ₹23.59 crore in interest for the SHPL Resolution Plan implementation. This settlement is subject to final orders from the Hon'ble Supreme Court of India. ## What just happened The company has entered into a Consent and Dispute Settlement Agreement with Assets Care & Reconstruction Enterprise Limited (ARC), the new financial asset holder of SHPL. This agreement aims to record the settlement and jointly approach the Supreme Court to dispose of pending legal proceedings. ## Why this matters This settlement is a crucial step towards implementing the SHPL Resolution Plan, potentially resolving long-standing litigation with Axis Bank, the former financial creditor of SHPL. The resolution of this plan involves significant financial commitments from Majestic Auto. ## The backstory Majestic Auto has been involved in legal proceedings concerning a resolution plan for SHPL, approved by the NCLT, which faced an appeal by Axis Bank to the Supreme Court. A settlement has now been negotiated with ARC, which has acquired SHPL's financial assets from Axis Bank. ## What changes now With the settlement agreement in place, Majestic Auto, alongside ARC, will jointly petition the Supreme Court. This move is expected to facilitate the disposal of pending cases and allow for the implementation of the resolution plan. Additionally, Securities Purchase Agreements have been signed with NovumLake Property Fund and 360 ONE Real Assets Advantage Fund to finance the resolution plan. ## Risks to watch The primary risk for investors is the dependency on the Hon'ble Supreme Court's orders for the plan's implementation and the transfer of securities. Conditions precedent in the agreements also need to be met for the deal to be effective. ## Peer comparison Majestic Auto's situation highlights the complex corporate restructuring and dispute resolution processes common in the auto components sector, where companies often navigate NCLT and Supreme Court proceedings to finalize asset resolutions. ## Context metrics (time-bound) Majestic Auto has committed to a Resolution Plan Amount of ₹81.84 crore and an Additional Interest Amount of ₹23.59 crore. ## What to track next Investors should closely monitor the Supreme Court's directives regarding the SHPL Resolution Plan and the fulfillment of all conditions precedent for the agreements with ARC, NovumLake, and 360 ONE.
