New Delhi, January 29, 2025 – AGI Greenpac Limited (BSE: 500187 | NSE: AGI) has suffered a legal setback after the Supreme Court of India ruled against its resolution plan for acquiring Hindusthan National Glass & Industries Limited (HNGIL). The ruling effectively blocks AGI Greenpac’s proposed takeover, which had previously been approved by the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code (IBC), 2016.
Supreme Court Ruling Against AGI Greenpac
In a majority decision, the three-judge bench of the Supreme Court held that AGI Greenpac’s acquisition plan for HNGIL failed to comply with mandatory regulatory requirements. The key legal issue revolved around whether or not the Competition Commission of India (CCI) approval was required before the CoC approved the resolution plan.- Verdict: The Court ruled that prior CCI approval is mandatory, striking down the National Company Law Appellate Tribunal (NCLAT) ruling, which had previously upheld AGI Greenpac’s bid.
- Legal Implications: The decision establishes a precedent, reinforcing that mergers requiring CCI approval must secure clearance before being presented to creditors for a vote.
Impact on AGI Greenpac
AGI Greenpac stated that the Supreme Court ruling will not impact its operations or financial stability despite the legal setback. The company focuses on organic growth, capacity expansion, and potential acquisitions.- Strategic Adjustments: AGI Greenpac is reviewing its legal options, including whether to submit a revised bid or pursue alternative acquisition targets.
- Growth Plans: The company reaffirmed its commitment to capacity expansion and exploring new acquisition opportunities beyond HNGIL.
Background of the HNGIL Acquisition
- After financial difficulties, HNGIL, India’s largest glass packaging manufacturer, entered the Corporate Insolvency Resolution Process (CIRP).
- AGI Greenpac, a leading player in the glass packaging and manufacturing sector, had emerged as the successful resolution applicant, securing 98% creditor approval.
- The deal, however, raised competition concerns, as AGI Greenpac and HNGIL together would have controlled 80-85% of the food & beverage glass packaging segment and 45-50% of the alco-beverage segment.
- Another bidder, Independent Sugar Corporation Ltd. (INSCO), challenged AGI Greenpac’s resolution plan, arguing that the CoC approved the plan without mandatory CCI clearance, which the Supreme Court upheld.
Market & Industry Implications
- The ruling is expected to impact future M&A transactions under the IBC, ensuring competition law compliance is a prerequisite before creditor approvals.
- HNGIL’s future remains uncertain, as the CoC may have to consider new bidders or explore other resolution strategies.
- Investors will closely monitor AGI Greenpac’s stock performance as they evaluate the company’s next steps in light of the legal ruling.