Among nearly 1,400 real estate/construction companies that were admitted into the corporate insolvency resolution process (CIRP) so far, 645 were “successfully rescued”, via resolution or closure, and 261 were liquidated, Insolvency and Bankruptcy Board of India (IBBI) Chairperson Ravi Mittal said on Tuesday.
He noted that the number of rescued companies has been 2.5 times those liquidated.
Stating that the insolvency code provided a structured mechanism for resolving insolvency, Mittal noted that insolvency resolution of real estate companies presents a unique set of challenges for the standardised Corporate Insolvency Resolution Process. “With the help of measures as introduced from time to time, several real estate companies have been successfully resolved under the IBC,” he said.
The measures are: designating home buyers as financial creditors, keeping possessed units out of liquidation estate, allowing project wise insolvency, and permitting home buyers to act as resolution applicants.
The large scale real estate cases, such as that of Jaypee Infratech, Kohinoor CTNL Infrastructure, SARE Gurugram and others have yielded recovery of more than 60% of the admitted claims, said the IBBI Chairman.
Mittal highlighted that as of June, as many as 3293 corporate debtors (CDs) have been rescued by the Code, and 2547 have been referred for liquidation.
The resolved CDs resulted in realisation of more than 32% as against the admitted claims, and more than 161% as against the liquidation value. “Resolution plans on average are yielding 84.9% of the fair value of CDs” noted Mittal.