Welcoming the NCLAT stay on all proceedings against IL&FS and its subsidiaries, the debt-laden firm Monday said it will enable value preservation of the group's assets and will also help the new board to evaluate and prepare a resolution plan.
Welcoming the NCLAT stay on all proceedings against IL&FS and its subsidiaries, the debt-laden firm Monday said it will enable value preservation of the group’s assets and will also help the new board to evaluate and prepare a resolution plan. The National Company Law Appellate Tribunal (NCLAT) Monday stayed all proceedings against Infrastructure Leasing & Financial Services (IL&FS) and its 348 group firms till a further order, after an urgent petition moved by the government following the NCLT turning down its plea to grant a 90-day moratorium over the loans taken by the firm.
“It would provide much needed relief from precipitative creditor actions against different entities within the IL&FS group,” the company said in a release Monday. The moratorium will enable value preservation of the group’s assets and will also assist the newly constituted board of directors of IL&FS in its effort to evaluate and prepare a resolution plan keeping various stakeholders in mind, it added.
NCLAT has also stayed all banks, financial institutions from exercising the right to set off or lien against any amounts lying with any creditor against any dues. The appellate tribunal has directed to list the government’s appeal on November 13 “for admission”. Meanwhile, the NCLAT clarified that the interim order will not be applicable to any writ petition filed before high courts or the Supreme Court.
It also directed to implead the top five lenders of IL&FS and asked to submit their replies over the government’s plea seeking 90 days moratorium. The infra lender is facing severe liquidity crisis and is sitting on a debt pile of around Rs 91,000 crore. After several debt repayment dafaults by IL&FS and group firms, the government on October 1 had superseded its board and appointed a new board, with banker Uday Kotak as its executive chairman.
The other board members include former Sebi chairman GN Bajpai, ICICI Bank non-executive chairman GC Chaturvedi, IAS officer and the director general of shipping Malini Shankar and Vineet Nayyar, veteran auditor Nandkishore and CS Rajan, former chief secretary of Rajasthan. In it’s second meeting held last week, the new board had announced austerity measures for personnel and operating expenses, along with appointing nominee directors for eight of IL&FS’ subsidiaries.