The National Companies Law Appellate Tribunal (NCLAT) will hear the government’s plea seeking moratorium on recovery of 90 days on loans by IL&FS and subsidiaries, recovery by third parties and will also hear five large creditors on November 13. IndusInd BankNSE -1.13 %, which is one of the large five, is likely to vote against the moratorium.
After taking over the management, the government had sought three months moratorium after 49 creditors, including bondholders, demanded payment under threat of legal proceedings. SIDBI has filed a petition against I F I N, a n d E n s o R a i l Infrastructure against IL&FS Rail. “If the moratorium is denied, a lot of bandwidth will go into following up the cases,” said a person close to the development.
“The court will consider the progress report and a lot will depend on what the ministry of corporate affairs (MCA) presents.” MCA is representing the government and the new board at the NCLT. Right now, there are 130 cases in various courts.
The government had said that IL&FS operates as a holding company across various businesses through more than 348 group companies including industries such as roads, power, engineering, financial services, maritime and urban development. IndusInd is one of the top five lenders to IL&FS. IndusInd Bank had approached NCLAT to recover outstanding interest amount of Rs 25 crore from IL&FS group to avoid being classified as an NPA account.
The NCLAT will also hear the IndusInd Bank matter on Tuesday. The bank has exposure of about Rs 3,000 crore. The government had superseded the board on October 1 and formed a six-member board headed by veteran banker Uday Kotak.
The new board submitted a plan to NCLT to revive the debt-laden company through outright sale of the entire IL&FS group and its subsidiaries or assets. The subsidiaries of IL&FS group have been defaulting on interest repayment due to insufficient fund availability.
Source: Economic Times