AGI Greenpac, a manufacturer of sanitary ware and glass containers, has requested a review of the Supreme Court’s January decision that annulled the approval of its resolution plan for the insolvent Hindusthan National Glass & Industries Ltd (HNGIL). The court’s ruling was based on AGI’s failure to secure prior consent from the Competition Commission of India (CCI). Alongside the review petition submitted on Tuesday, AGI Greenpac has also approached the Kolkata bench of the National Company Law Tribunal (NCLT) to prevent the committee of creditors (CoC) and the resolution professional of HNGIL from proceeding with any actions until the Supreme Court resolves the review petition.
Background: HNGIL, the largest container glass manufacturer in India, was declared insolvent in October 2021 by the Kolkata bench of the NCLT. During the corporate insolvency resolution process (CIRP), AGI Greenpac, valued at ₹5,000 crore, and Bermuda-based Independent Sugar Corporation (ISC) competed to acquire HNGIL, with both offering around ₹2,200 crore. Approval from the CCI was necessary for both resolution plans.
AGI sought permission from the resolution professional (RP) to obtain CCI approval after receiving the CoC’s consent, which was granted. AGI submitted a notice to the CCI on September 27, 2022, but the CCI rejected it as invalid due to the high market share of the proposed combined entity, instructing AGI to re-file. HNGIL holds a 60% market share in India’s glass packaging sector, serving various industries, including pharmaceuticals, cosmetics, food and beverages, and alcoholic beverages. AGI is the second-largest player in the country’s glass packaging and manufacturing industry.
The proposed merger between AGI Greenpac and HNGIL could lead to a market share of 80-85% in the food and beverage segment and 45-50% in the alcoholic beverage segment, raising significant competition concerns, as noted by the Supreme Court on January 29. The combination of these two major industry players is likely to negatively impact competition in the glass packaging market, particularly in the food and beverage and alcoholic beverage sub-segments.
On October 28, 2022, the CoC approved AGI’s resolution plan despite the absence of prior CCI approval. Following this, AGI re-filed the notice with the CCI, which issued a show-cause notice due to potential anti-competitive issues but granted conditional approval for the merger on March 15, 2023, after AGI presented a divestment plan. ISC subsequently challenged the approval of AGI’s resolution plan before the NCLT, arguing that CCI approval was necessary before CoC approval. The NCLT dismissed ISC’s application, leading to an appeal to the NCLAT, which also rejected it, stating that CCI approval prior to CoC approval was not mandatory.
