Modi govt sets March deadline to resolve 9 insolvency cases

The Supreme Court, last Friday, upheld the constitutional validity of the insolvency law that bars founders of companies that are loan defaulters from buying back stressed assets.

Emboldened by the Supreme Court's decision, the Government of India has asked lenders and resolution professionals (RPs) to close nine of the twelve high-value insolvency cases, with special focus on Essar Steel and Jaypee Infratech, say media reports.
 
The Supreme Court, last Friday, upheld the constitutional validity of the insolvency law that bars founders of companies that are loan defaulters from buying back stressed assets.
 
The other seven high-value stressed accounts include Bhushan Power, Alok Industries, ABG shipyards, Amtek Auto, Lanco, Era Infrastructure and Jyoti Structures. These companies cumulatively account for nearly Rs 2.5 lakh crore to lenders. 
 
In June 2017, the Reserve Bank of India had sent the list of 12 stressed accounts to bankers that they should resolve through the Insolvency and Bankruptcy Code. However, the insolvency proceedings against these 12 companies are yet to be completed.
 
According to the insolvency law, a resolution plan must be in place within 180 days of submission of the case at NCLAT. This is extendable by up to 90 days. In case the turnaround doesn't happen, the company's assets need to be liquidated.
 
Three – Tata Steel, Electrosteel Steels and Monnet Ispat and Energy Ltd – out of the 12 high-profile cases stand resolved as of date. Tata Steel has taken over Bhushan Steel for Rs 35,200 crore; Anil Agarwal-controlled Vedanta acquired Electrosteel Steels; and JSW Steel and its promoters acquired around 88 per cent stake in the Monnet Ispat and Energy Ltd (MIEL).
 
Source: Businesstoday, media reports

Add new comment