Kilburn Office Automation Limited, based in Kolkata, has received significant news with the approval of its resolution plan under the Corporate Insolvency Resolution Process (CIRP), as per the order of the Hon'ble National Company Law Tribunal (NCLT). This approval marks a pivotal moment for the company, as it aims to restructure and turn around its operations under new leadership and strategic direction. Below, we delve into the key features of this resolution, the changes in its financial structure, and the plan for future growth.

Resolution Plan Approval and Financial Adjustments

As part of the ongoing insolvency proceedings, the NCLT approved the resolution plan put forward by Candid Resources Limited, which involves a detailed strategy to ensure the revival of Kilburn Office Automation Limited. The resolution plan was officially sanctioned on 26th February 2024, with specific outcomes relating to the company’s net worth and shareholding.

Pre and Post-Net Worth of Kilburn Office Automation

Before the resolution process began, Kilburn’s net worth stood at a negative INR 2,34,96,500 (as of March 31, 2023). However, with the successful resolution plan, the post-net worth as of February 26, 2024, now stands at INR 1,71,33,255. This change signifies an improvement in the company's financial standing post-CIRP.

Shareholding Changes Post-Resolution Plan

A significant shift has occurred in the shareholding structure of Kilburn Office Automation. Before the CIRP process, the promoter group held 50.85% of the shares, with the public shareholders holding the remaining 49.15%. After the resolution plan, SRA (Strategic Resolution Applicant), through its Special Purpose Vehicle (SPV), has acquired 93.78% of the shares, while the public holds only 6.22% of the equity. This change is part of the company’s business restructuring, where existing shares held by the promoter group were canceled, and public shareholders received one share for every hundred held.

Financial Creditors and Liability Discharge

Another significant aspect of the approved plan is the treatment of financial creditors. As per the resolution plan, the creditors' charges over the company’s assets will remain in place until full payment is made. Once all dues are cleared, the creditors are required to issue a certificate of discharge and release the security interests over Kilburn's assets, paving the way for the company's financial reset.

Business Strategy and Future Outlook

The core focus of the approved resolution plan is to turnaround Kilburn Office Automation’s operations. The SRA’s proposed strategy includes a period of "overhauling," which will span six months from the approval date. During this time, the SRA will conduct an in-depth review of Kilburn’s existing business processes, workforce requirements, and market positioning to ensure long-term profitability.

Key initiatives include:

• Assessing and updating current business processes to streamline operations.
• Rejuvenating the sales pipeline and focusing on higher order books.
• Potential partnerships and market expansion plans within the IT industry and electronics sector.
• Identification of non-core assets for possible liquidation to raise funds.
• Formation of a strong management team with experts from the IT sector.

In addition, the SRA will infuse INR 50,00,000 for acquiring new shares and ensuring the financial stability required to take the company forward.

Investor Considerations and Public Shareholding

Another noteworthy change is the plan to increase public shareholding to comply with regulatory requirements. The SRA will ensure that public shareholding reaches at least 10% within the next 12 months, and 25% within the next 3 years, thereby ensuring compliance with SEBI guidelines for minimum public shareholding.

No Delisting Plans

Despite the changes in shareholding and ownership, there are no plans to delist Kilburn Office Automation from the stock exchanges. The company intends to remain listed and focus on restructuring its operations and expanding its market presence.

The future of Kilburn Office Automation Limited looks promising with the new strategic direction outlined in the resolution plan. The incoming leadership, including Mr. Gaurav Vijaymukar Kasat and Mr. Yogesh Mandhani, brings a wealth of business expertise and experience, particularly in the steel industry, which could be instrumental in expanding Kilburn’s footprint in the technology and electronics sectors.

The Upcoming IPOs in this week and coming weeks are Lomosaic India, C2C Advanced System, Enviro Infra, Rajesh Power Services, Rajputana Biodiesel, Rosmerta Digital, Avanse Financial and Nisus Finance.

For those interested in exploring financial independence, investment opportunities, and learning about current affairs, platforms like Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today provide excellent resources for growing your knowledge and wealth. Additionally, staying informed through Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News can keep you updated on the latest trends in the world of finance.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.