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The ongoing issue involving Supreme Infrastructure India Limited (<keyword id="23294280" type="General" weightage="20" keywordseo="SIIL" source="keywords">SIIL</keyword>) and the State Bank of India (<keyword id="19898108" type="General" weightage="100" keywordseo="SBI" source="keywords">SBI</keyword>) has become a focal point in India’s financial and political landscape. It concerns SIIL’s default on significant loans and SBI’s decision to convert this debt into equity, raising concerns about the precedent it may set for future debt resolutions in India. <h2>SIIL's financial troubles</h2>SIIL, a construction and infrastructure company, was once engaged in large-scale projects such as roads and bridges across India. Over the years, however, the company faced severe financial troubles due to project delays and insufficient revenues. As SIIL’s cash flow problems worsened, it struggled to repay its loans, leading to the company’s default. The State Bank of India (SBI), being SIIL’s largest lender, found itself at the centre of this financial turmoil, as SIIL declared bankruptcy. In response, SBI decided to take an unusual step to recover its dues. <h2>SBI's debt-to-equity conversion decision</h2>In a surprising move, SBI converted its outstanding debt into equity in SIIL. This means that instead of pursuing traditional recovery methods or selling off assets, SBI has now become an equity stakeholder in SIIL, shifting from being its primary lender to part-owner. The controversial decision also involved other lenders who agreed to take a 93.45% “haircut” on the debt, which indicates that they are recovering only a fraction of the original loans extended to SIIL. <h2>Criticism and concerns</h2>The decision has drawn sharp criticism, particularly from political circles. <keyword id="19895371" type="General" weightage="20" keywordseo="Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Congress" meta.hostid="261" meta.entityid="Congress">Congress</keyword> leader Jairam Ramesh, through a post on the social media platform X (formerly Twitter), criticised SBI’s approach and raised several concerns. He highlighted that SBI’s decision to become an equity stakeholder in a company that declared bankruptcy could set a "dangerous precedent in India’s <keyword id="20575563" type="General" weightage="20" keywordseo="corporate-debt" source="keywords">corporate debt</keyword> landscape". "This arrangement creates a dangerous precedent in India's corporate debt landscape — it encourages other defaulting companies to seek similar deals, where they can retain control and value even after significant defaults," Ramesh noted. <div type="Article" hostid="261" msid="112987756" title="Congress alleges SEBI Chairperson Madhabi Puri Buch of office for profit" mstype="2" mssubtype="0"></div>His concerns extend to how this move might affect the <keyword id="20158086" type="General" weightage="20" keywordseo="Insolvency-and-Bankruptcy-Code" source="keywords">Insolvency and Bankruptcy Code</keyword> (IBC) and India’s overall framework for handling distressed companies. By converting <keyword id="22921090" type="General" weightage="20" keywordseo="debt-to-equity" source="keywords">debt to equity</keyword>, SBI could be seen as aligning itself with the interests of the defaulting borrower (SIIL) rather than prioritising the recovery of public funds, which are at stake in cases involving <keyword id="19959986" type="General" weightage="20" keywordseo="public-sector-banks" source="keywords">public sector banks</keyword> like SBI. “The SBI appears to be aligning itself with the interests of the defaulting borrower (SIIL) rather than prioritising the recovery of public funds,” Ramesh further argued. "The Reserve Bank of India (RBI) needs to step in and examine SBI's decision-making process in this matter." Given the unusual nature of this debt restructuring and the potential risks it introduces, Congress is urging the Reserve Bank of India (RBI) to step in and examine SBI’s decision-making process. Ramesh emphasised the need for regulatory scrutiny to ensure that public sector banks maintain discipline in their approach to resolving bad loans. Congress' position is that SBI’s move could create a moral hazard within India’s <keyword id="19964544" type="General" weightage="20" keywordseo="banking-sector" source="keywords">banking sector</keyword>, encouraging more companies to default on their loans with the hope of retaining control through similar debt-to-equity swaps. Ramesh pointed out that the entire situation raises questions about how distressed assets should be managed by public sector banks, and whether SBI’s actions are truly in the best interests of the public. <div type="Article" hostid="261" msid="113620397" title="SEBI report reveals the ugly truth of F&amp;amp;O trading in India – 93% of retail traders incurred losses" mstype="2" mssubtype="0"></div>"There is a pressing need to ensure that public sector banks maintain strict discipline in their approach to debt resolution and avoid creating moral hazards in the financial system." <h2>Broader implications</h2>This situation shines a light on broader challenges in India’s banking and insolvency frameworks. When public sector banks like SBI take significant financial losses (haircuts) and switch from creditors to shareholders, it risks undermining confidence in the banking sector’s ability to handle bad loans effectively. Moreover, it raises questions about the long-term sustainability of the Insolvency and Bankruptcy Code (IBC) if companies that default can avoid paying back substantial portions of their debt and still retain operational control. (With inputs from PTI)

Congress criticises SBI's decision to convert SIIL debt into equity, urges RBI intervention

The <keyword id="19895345" type="General" weightage="20" keywordseo="Supreme-Court" source="keywords">Supreme Court</keyword> on Friday agreed to list for an early hearing the appeal of US-based creditor Glas Trust Company LLC against a judgment of the <keyword id="19916400" type="General" weightage="20" keywordseo="NCLAT" source="keywords">NCLAT</keyword>, which had stayed <keyword id="19965539" type="General" weightage="20" keywordseo="insolvency-proceedings" source="keywords">insolvency proceedings</keyword> against ed-tech firm <keyword id="19958178" type="General" weightage="20" keywordseo="Byjus" source="keywords">BYJU's</keyword> and approving its Rs 158.9 crore dues settlement with the <keyword id="19901245" type="General" weightage="20" keywordseo="BCCI" source="keywords" meta.keywordsubtype="org" meta.entityname="BCCI" meta.hostid="153" meta.entityid="BCCI">BCCI</keyword>. A bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra was urged by senior advocate NK Kaul, appearing for the ed-tech major, that the case needed to be heard at the earliest. Kaul said, "The only funding was done by the promoters and today no one has brought any external borrowing. We have to show today how malafide the petition (of US firm) is." "I will get it listed as early as possible," the CJI, who was indisposed and in quarantine for the last few days, said. Senior advocate Kapil Sibal, appearing for the US-based creditor, said it also wanted an early hearing. Earlier on August 22, the bench had refused to pass an interim order to ensure that the committee of creditors (CoC) does not hold any meeting in pursuance of the insolvency proceedings against the embattled ed-tech firm. It had listed the plea for a final hearing on August 27. The bench had said the developments, which may take place in the meantime, can be negated if it finds there was no merit in the appeal of the US-based creditor against the judgment of appellate insolvency tribunal NCLAT. The plea was mentioned earlier also on August 20 by Byju's and the BCCI and the top court had then also refused to pass an interim order to restrain the Insolvency Resolution Professional (IRP) from constituting a committee of creditors (CoC) in the insolvency proceedings against the ed-tech firm. In a major setback to Byju's, the top court had on August 14 stayed the verdict of NCLAT, setting aside the insolvency proceedings against the ed-tech major and approving its Rs 158.9 crore dues settlement with the Indian cricket board. The August 2 verdict of the NCLAT had come as a huge relief for Byju's as it had effectively put its founder Byju Raveendran back in control. The top court, however, had prima facie termed the NCLAT verdict as "unconscionable" and stayed its operation while issuing notices to Byju's and others on the appeal of the ed-tech firm's US-based creditor against the judgment of the insolvency appellate tribunal. The case stemmed from Byju's default on a Rs 158.9 crore payment related to a sponsorship deal with the BCCI. The top court had directed the BCCI to keep a sum of Rs 158 crore it had received from Byju's after a settlement in a separate escrow account till further orders. "Issue notice. Pending further orders there shall be a stay of the impugned order of August 2 of NCLAT. In the meantime, BCCI shall maintain the amount of Rs 158 crore, which shall be realised in pursuance of a settlement, in a separate escrow account until further orders," the bench had said. The NCLAT had approved the Rs 158.9 crore dues settlement with the BCCI and set aside the insolvency proceedings against Byju's. Byju's had entered into a "Team Sponsor Agreement" with the BCCI in 2019. Under the agreement, the ed-tech firm got exclusive rights to display its brand on the Indian cricket team's kit and some other benefits. Byju's had to pay a sponsorship fee. The company met its obligations till the middle of 2022 but defaulted on subsequent payments of Rs 158.9 crore. After insolvency proceedings were initiated, Byju's entered into a settlement with the BCCI. On July 16, the Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted 'Think and Learn', Byju's parent company, to the insolvency resolution process on a plea filed by the BCCI over default in payment of outstanding dues of almost Rs 158.9 crore. While suspending the board of the ed-tech firm, the NCLT had appointed an interim resolution professional to run the operations of the company, suspended the company's board of directors, and brought it under moratorium by freezing its assets. The US-based lenders suspected that the settlement amount was being diverted from the credit they had extended to Byju's. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/india-beats-the-us-to-emerge-as-the-second-biggest-market-for-5g-smartphones/articleshow/113095322.cms">India beats the US to emerge as the second-biggest market for 5G smartphones</a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-iphone-16-to-launch-on-september-9-design-specs-and-everything-we-know-so-far/articleshow/113091114.cms">Apple iPhone 16 to launch on September 9 – design, specs and everything we know so far</a> <a href="https://www.businessinsider.in/stock-market/webstories/shree-tirupati-balajee-agro-trading-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/113082663.cms">Shree Tirupati Balajee Agro Trading IPO – Price band to risk factors, all you need to know</a>

Supreme Court agrees to list plea related to insolvency proceedings against ed-tech firm Byju's

<keyword id="12792045" type="General" weightage="100" keywordseo="Future-Lifestyle" source="Orion">Future Lifestyle</keyword> Fashions Ltd has received a total claim of Rs 2,155.53 crore from 12 financial creditors in the <keyword id="5961445" type="General" weightage="20" keywordseo="corporate-insolvency-resolution-process" source="Orion">corporate insolvency resolution process</keyword> (CIRP) initiated against this Future group company recently. The resolution professional of the company has provisionally admitted claims of Rs 2,117.03 crore and claims worth Rs 38.5 crore are "under verification", said the latest data shared by Future Lifestyle Fashions Ltd (<keyword id="1567510" type="General" weightage="80" keywordseo="flfl" source="Orion">FLFL</keyword>) on the exchanges. As per the provision of the Insolvency &amp; Bankruptcy Code, a Committee of Creditors (CoC) of FLFL has been formed and it will have its first meeting next week. "We wish to inform you that the first meeting of CoC of Future Lifestyle Fashions Limited (under CIRP) will be held on Tuesday, June 6, 2023," it said. On May 4, the Mumbai bench of the National Company Law Tribunal(NCLT) had directed to initiate CIRP against FLFL, admitting a petition from Bank of India. This is the third company of the <keyword id="6361562" type="General" weightage="50" keywordseo="kishore" source="Orion">Kishore</keyword> Biyani-led Future Group to be dragged into CIRP by its creditors for defaulting on loans. Its flagship firm <keyword id="1636009" type="General" weightage="50" keywordseo="future-retail-ltd" source="Orion">Future Retail Ltd</keyword> and logistics and infra arm Future Enterprises are already facing insolvency proceedings. FLFL was considering asset monetisation to pare its debts, however, it did not materialise. It had entered into a One Time Restructuring (OTR) Plan with lenders also. The company has in-house retail chains Central and Brand Factory, exclusive brand outlets (EBOs) and other multi-brand outlets (MBOs) of nearly a dozen apparel labels, including Lee Copper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana in its portfolio. According to the regulatory filing, State Bank of India leads the CoC of FLFL with 22.51 per cent voting share. It had an admitted loan of Rs 476.59 crore. It is followed by Centbank Financial Services Ltd, a debenture trustee, having 21.01 per cent voting share with admitted claims of Rs 444.76 crore. The petitioner Bank of India has a 19.71 per cent voting share with admitted claims of Rs 417.33 crore and Bank of Baroda has a 14.02 per cent voting share with an admission of Rs 296.79 crore of claims. FLFL was part of the 19 group companies operating in retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to <keyword id="58448" type="General" weightage="50" keywordseo="reliance-retail" source="Orion">Reliance Retail</keyword> as part of a Rs 24,713-crore deal announced in August 2020. The deal was called off by billionaire Mukesh Ambani-led Reliance Industries Ltd in April. After that, Future Group companies had several defaults on payments. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/meta-unveils-vr-headset-quest-3-ahead-of-apples-wwdc-event/articleshow/100698048.cms">Meta unveils VR headset 'Quest 3' ahead of Apple’s WWDC event</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/2-in-3-indian-screenwriters-lament-lack-of-pay-incentives/articleshow/100700189.cms">Behind the scenes: 2 in 3 Indian screenwriters lament lack of pay incentives</a>

Future Lifestyle Insolvency: RP receives claims of ₹2,155.53 cr from financial creditors

New Delhi: The <keyword id="19895345" type="General" weightage="20" keywordseo="supreme-court" source="keywords">Supreme Court</keyword> on Wednesday said it will hear on September 17 the appeal of US-based creditor Glas Trust Company LLC against a judgment of the <keyword id="19916400" type="General" weightage="20" keywordseo="nclat" source="keywords">NCLAT</keyword>, which had stayed insolvency proceedings against ed-tech firm BYJU's and approved its Rs 158.9 crore dues settlement with the <keyword id="19901245" type="General" weightage="20" keywordseo="bcci" source="keywords">BCCI</keyword>. A bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra was urged by a battery of lawyers that the plea be heard urgently keeping in mind the subsequent developments in the case. The plea was mentioned by senior advocate NK Kaul, appearing for the ed-tech major, that the case needed to be heard at the earliest. The submission was supported by Solicitor General Tushar Mehta, appearing for the BCCI, and senior lawyer Abhishek Singhvi, also appearing for the ed-tech firm. Kaul said another plea in the case has also been filed and that is listed for hearing on September 17 and hence, the present plea be either heard on that day or the hearings in both the cases be advanced to this Friday. "We will hear both the pleas on September 17," the CJI said. Senior advocate Shayam Divan, appearing for the US-based creditor, said let the matters be heard together on September 17. Earlier on August 22, the bench had refused to pass an interim order to ensure that the committee of creditors (CoC) does not hold any meeting in pursuance of the insolvency proceedings against the embattled ed-tech firm. It had listed the plea for a final hearing on August 27. The bench had said the developments, which may take place in the meantime, can be negated if it finds there was no merit in the appeal of the US-based creditor against the judgment of appellate insolvency tribunal NCLAT. The plea was mentioned earlier also on August 20 by Byju's and the BCCI and the top court had then also refused to pass an interim order to restrain the Insolvency Resolution Professional (IRP) from constituting a committee of creditors (CoC) in the insolvency proceedings against the ed-tech firm. In a major setback to Byju's, the top court had on August 14 stayed the verdict of NCLAT, setting aside the insolvency proceedings against the ed-tech major and approving its Rs 158.9 crore dues settlement with the Indian cricket board. The August 2 verdict of the NCLAT had come as a huge relief for Byju's as it had effectively put its founder Byju Raveendran back in control. The top court, however, had prima facie termed the NCLAT verdict as "unconscionable" and stayed its operation while issuing notices to Byju's and others on the appeal of the ed-tech firm's US-based creditor against the judgment of the insolvency appellate tribunal. The case stemmed from Byju's default on a Rs 158.9 crore payment related to a sponsorship deal with the BCCI. The top court had directed the BCCI to keep a sum of Rs 158 crore it had received from Byju's after a settlement in a separate escrow account till further orders. "Issue notice. Pending further orders there shall be a stay of the impugned order of August 2 of NCLAT. In the meantime, BCCI shall maintain the amount of Rs 158 crore, which shall be realised in pursuance of a settlement, in a separate escrow account until further orders," the bench had said. The NCLAT had approved the Rs 158.9 crore dues settlement with the BCCI and set aside the insolvency proceedings against Byju's. Byju's had entered into a "Team Sponsor Agreement" with the BCCI in 2019. Under the agreement, the ed-tech firm got exclusive rights to display its brand on the Indian cricket team's kit and some other benefits. Byju's had to pay a sponsorship fee. The company met its obligations till the middle of 2022 but defaulted on subsequent payments of Rs 158.9 crore. After insolvency proceedings were initiated, Byju's entered into a settlement with the BCCI. On July 16, the Bengaluru bench of the <keyword id="19902197" type="General" weightage="20" keywordseo="national-company-law-tribunal" source="keywords">National Company Law Tribunal</keyword> (NCLT) had admitted 'Think and Learn', Byju's parent company, to the insolvency resolution process on a plea filed by the BCCI over default in payment of outstanding dues of almost Rs 158.9 crore. While suspending the board of the ed-tech firm, the NCLT had appointed an interim resolution professional to run the operations of the company, suspended the company's board of directors, and brought it under moratorium by freezing its assets. The US-based lenders suspected that the settlement amount was being diverted from the credit they had extended to Byju's.

SC to hear plea related to insolvency proceedings against ed-tech firm Byju's on Sept 17

The <keyword id="6355809" type="General" weightage="20" keywordseo="NCLT" source="Orion">NCLT</keyword> has granted <keyword id="375475" type="General" weightage="20" keywordseo="Future-Retail" source="Orion">Future Retail</keyword> Ltd (FRL) an extension of 90 days for concluding the <keyword id="5961445" type="General" weightage="20" keywordseo="Corporate-Insolvency-Resolution-Process" source="Orion">Corporate Insolvency Resolution Process</keyword> (CIRP) of the company. Allowing FRL's plea the Mumbai bench of the National Company Law Tribunal (NCLT) has extended the deadline to July 15, 2023, for concluding the CIRP of FRL. "... NCLT on April 13, 2023, heard the application and granted the said exclusion of 90 days from CIRP of FRL and consequent extension for completion of CIRP till July 15, 2023," said a regulatory filing from the company. This order was pronounced orally by NCLT on April 13, 2023, and a "written order is awaited", FRL added. The CIRP was initiated against FRL by NCLT on July 20, 2022, following loan default. The Insolvency and Bankruptcy Code (IBC) time frame for resolution is 330 days, inclusive of the time taken for litigation. As per Section 12(1) of the Code, the CIRP shall be completed within a period of 180 days from the date of initiation. However, NCLT may grant a one-time extension of 90 days. The maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days. Last week, FRL informed that they have received an Expression of Interest (EoI) from 49 players, including <keyword id="10926" type="General" weightage="20" keywordseo="Reliance" source="Orion">Reliance</keyword> Retail, Jindal Power Ltd and <keyword id="6367820" type="General" weightage="20" keywordseo="Adani-Group" source="Orion">Adani Group</keyword> for acquiring the assets of FRL. On March 23, 2023, the resolution professional (RP) of FRL invited new expressions of interest, where prospective buyers can bid for the debt-ridden firm "as a going concern or individual cluster or a combination of clusters of its assets", as it failed to attract a resolution plan in over four months. Earlier, it had received EoI and finalised 11 prospective bidders, including Reliance and April Moon Retail, but could not get a resolution plan despite two extensions in the deadline for submissions. The Committee of Creditors had provided two options in the EoI, for which the last date for submission was April 7, 2023. In the first option, the Prospective Resolution Applicant (PRA) could bid for the acquisition of Future Retail as a whole, including its shareholding interest in its subsidiaries. While under the second option, Future Retail's business has been distributed in five clusters diving business, in which PRAs can bid for "any individual cluster or any combination of clusters." As per the invitation, FRL currently has access to 302 leased retail stores spread across 23 states and Union Territories, consisting of 30 large format stores such as <keyword id="6357823" type="General" weightage="20" keywordseo="Big-Bazaar" source="Orion">Big Bazaar</keyword> and <keyword id="17144190" type="General" weightage="20" keywordseo="FBB-stores" source="Orion">FBB stores</keyword> and 272 small format stores. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/even-mild-covid-infection-can-cause-sudden-hearing-loss-study/articleshow/99488945.cms">Even mild Covid infection can cause sudden hearing loss: Study</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/pfizers-new-bivalent-mrna-covid-booster-vax-highly-effective-lancet/articleshow/99488979.cms">Pfizer's new bivalent mRNA Covid booster vax highly effective: Lancet</a>

NCLT grants 90 days extension to Future Retail for concluding insolvency

Byju's Founder <keyword id="1702989" type="General" weightage="100" keywordseo="Byju-Raveendran" source="Orion">Byju Raveendran</keyword>'s plea against the insolvency of <keyword id="19901241" type="General" weightage="20" keywordseo="Think-Learn" source="keywords">Think &amp; Learn</keyword> before the NCLAT was adjourned on Monday, as one of the members of the bench recused from the hearing. The matter will be placed before a bench headed by <keyword id="19916403" type="General" weightage="20" keywordseo="National-Company-Law-Appellate-Tribunal" source="keywords" meta.keywordsubtype="org" meta.entityname="National Company Law Appellate Tribunal" meta.hostid="345" meta.entityid="National Company Law Appellate Tribunal">National Company Law Appellate Tribunal</keyword> (NCLAT) Chairman Justice Ashok Bhushan, who will assign a different bench to hear the matter. Raveendran had filed a petition challenging the initiation of <keyword id="19965539" type="General" weightage="20" keywordseo="insolvency-proceedings" source="keywords">insolvency proceedings</keyword> against Think &amp; Learn, which runs edtech company Byju's. The matter was listed on Monday before a two-member Chennai-based bench of the NCLAT comprising Justice Sharad Kumar Sharma, Member (Judicial), and Jatindranath Swain, Member (Technical). However, Justice Sharma recused himself from the hearing, saying he had appeared as the counsel for the Board of Control for Cricket in India (<keyword id="19901245" type="General" weightage="20" keywordseo="BCCI" source="keywords" meta.keywordsubtype="org" meta.entityname="BCCI" meta.hostid="345" meta.entityid="BCCI">BCCI</keyword>) before his elevation. "I have appeared as a senior counsel for (the) BCCI. Since they are the main beneficiaries of this order, I cannot take this up," said Sharma. The Bengaluru bench of the National Company Law Tribunal (<keyword id="19901085" type="General" weightage="20" keywordseo="NCLT" source="keywords">NCLT</keyword>) on July 16 directed Corporate Insolvency Resolution Proceedings (CIRP), admitting the plea filed by the BCCI. The BCCI had approached the NCLT under the Insolvency and Bankruptcy Code (IBC) over a default of Rs 158.9 crore by Think &amp; Learn -- once India's most valuable startup worth an estimated $22 billion. NCLT has suspended the board of Think &amp; Learn Pvt Ltd as per the provisions of the IBC and had appointed an interim resolution professional (IRP) to take care of the debt-ridden firm. Raveendran challenged the NCLT order before the appellate tribunal NCLAT. He has also approached the Karnataka High Court. The high court had, on July 26 deferred Raveendran's plea to July 30. At the high court, Raveendran challenged the validity of the order and suspension of the NCLT order till the NCLAT hears the appeal.

NCLAT judge recuses from hearing Raveendran's plea against insolvency proceedings of Byju

The <keyword id="6354457" type="General" weightage="50" keywordseo="national-company-law-tribunal" source="Orion">National Company Law Tribunal</keyword> has approved a ₹1,814 crore resolution plan for the private hill station <keyword id="136664" type="General" weightage="80" keywordseo="lavasa" source="Orion">Lavasa</keyword>, nearly five years after the initiation of the <keyword id="128499" type="General" weightage="80" keywordseo="insolvency" source="Orion">insolvency</keyword> resolution process. <keyword id="12809273" type="General" weightage="50" keywordseo="darwin-platform-infrastructure-ltd" source="Orion">Darwin Platform Infrastructure Ltd</keyword> (DPIL) has emerged as the winning bidder for <keyword id="201476" type="General" weightage="50" keywordseo="lavasa-corporation-ltd" source="Orion">Lavasa Corporation Ltd</keyword>, which is primarily into the business of the development of the private hill station by the same name in Pune. In a 25-page order passed on Friday, the tribunal cleared the resolution plan at an investment of ₹1,814 crore. The amount includes a "resolution plan amount of ₹1,466.50 crore to be paid/ discharged from funds infused over multiple tranches into the corporate debtor by way of cash funding and instruments, being equity, Project inflows, loans, advances or a combination thereof," the order said. The corporate debtor is Lavasa. A monitoring committee comprising the insolvency professional (earlier resolution professional), one representative each from financial creditors and <keyword id="12585854" type="General" weightage="100" keywordseo="darwin-platform" source="Orion">Darwin Platform</keyword> will supervise the implementation of the resolution plan. "The resolution plan meets the necessary statutory requirements under the Code as well as the regulations, we hereby approve the same," the <keyword id="6355809" type="General" weightage="80" keywordseo="nclt" source="Orion">NCLT</keyword> said. The petition for the insolvency resolution process under the Insolvency and Bankruptcy Code (<keyword id="192838" type="General" weightage="50" keywordseo="ibc" source="Orion">IBC</keyword>) was initiated in August 2018. Set up in 2010 and a part of the <keyword id="7634213" type="General" weightage="50" keywordseo="darwin-platform-group" source="Orion">Darwin Platform Group</keyword>, promoted by <keyword id="14721127" type="General" weightage="50" keywordseo="ajay-harinath" source="Orion">Ajay Harinath</keyword> Singh, DPIL is engaged in infrastructure contracts and services and caters to various segments like infrastructure, refineries, retail and hospitality, among others. "The NCLT has entrusted us with a challenging task to develop an ambitious world-class smart city in the country. The verdict would reinforce our commitment to nation-building. Lavasa is now on the cusp of a remarkable resurgence. DPIL is committed to executing the plan as per the schedule proposed to the CoC. We are very eager to revitalise this ambitious project," Singh said in a statement. Giving assurance to homebuyers, he said, "The plight of homebuyers, along with the concerns of secured financial creditors, would not go unnoticed by DPIL. The company promises to include the stakeholders in the revival process and prioritise their needs". SEE ALSO:<a href="https://www.businessinsider.in/business/auto/news/cars-and-suv-with-sunroof-under-10-lakh-in-india/slidelist/102017132.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/cars-and-suv-with-sunroof-under-10-lakh-in-india/slidelist/102017132.cms" target="_blank">Tata Altroz becomes cheapest car with a sunroof – Cars under ₹10 lakh with this feature</a><a href="https://www.businessinsider.in/tech/mobile/news/oppo-reno-10-vs-oneplus-nord-3-mid-range-smartphones-compared-price-specs-and-more/slidelist/102005130.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/oppo-reno-10-vs-oneplus-nord-3-mid-range-smartphones-compared-price-specs-and-more/slidelist/102005130.cms" target="_blank">Oppo Reno 10 vs OnePlus Nord 3 - The camera vs processor clash in the mid-range segment</a> <a href="https://www.businessinsider.in/business/news/netflix-india-ends-password-sharing-outside-households/articleshow/101976844.cms">Netflix India ends password sharing outside households – Here’s how it will work</a>

NCLT approves ₹1,814 crore resolution plan for Lavasa: Darwin Platform winning bidder

As many as 48 companies, including Reliance Retail, Jindal Power Ltd and Adani Group, are on the final list of eligible prospective resolution applicants for acquiring debt-ridden Future Retail Ltd. The <keyword id="17234676" type="General" weightage="50" keywordseo="resolution-professional-of-future-retail-ltd" source="Orion">Resolution Professional of Future Retail Ltd</keyword> (<keyword id="658389" type="General" weightage="80" keywordseo="frl" source="Orion">FRL</keyword>), which is currently going through an insolvency resolution process, on Monday came out with the final list of 'Eligible Prospective Resolution Applicants'. On April 10, FRL's RP updated a list of 49 companies, which had submitted Expressions of Interest (EoIs) after the company's lenders decided to invite fresh bids after dividing its assets into clusters. Some of the other players who had submitted EoIs include <keyword id="17234674" type="General" weightage="50" keywordseo="whsmith-travel-ltd" source="Orion">WHSmith Travel Ltd</keyword>, Sahara Enterprises, Century Copper Corp, Greentech worldwide, <keyword id="1726468" type="General" weightage="50" keywordseo="harsha-vardhan-reddy" source="Orion">Harsha Vardhan Reddy</keyword>, J C Flowers Asset Reconstruction Pvt Ltd, Pinnacle Air Pvt Ltd and <keyword id="17234675" type="General" weightage="50" keywordseo="universal-associates" source="Orion">Universal Associates</keyword>. Except for Bommidala Enterprises, an Andhra Pradesh-based manufacturer of tobacco products, all companies have been included in the final list. Bommidala Enterprises indicated that it will not be submitting a resolution plan. Earlier this month, the Mumbai-based NCLT bench granted FRL an extension of 90 days till July 15, 2023, for concluding the Corporate Insolvency Resolution Process (CIRP). On March 23, 2023, creditors of FRL invited new EoIs whereby prospective buyers can bid for the debt-ridden firm "as a going concern or individual cluster or a combination of clusters of its assets", as it failed to attract a resolution plan in more than four months. Earlier, it had received EoIs and finalised 11 prospective bidders, including Reliance and <keyword id="15486694" type="General" weightage="50" keywordseo="april-moon-retail" source="Orion">April Moon Retail</keyword>, but could not get a resolution plan despite two extensions in the deadline for submissions. The Committee of Creditors had provided two options in the EoI, for which the last date for submission was April 7, 2023. In the first option, the Prospective Resolution Applicant (PRA) could bid for the acquisition of FRL as a whole, including its shareholding interest in the subsidiaries. Under the second option, FRL's business has been distributed into five clusters and PRAs can bid for "any individual cluster or any combination of clusters". "Having regard to the complexity and scale of operations of FRL, the resolution professional has, in consultation with and prior approval of the <keyword id="230701" type="General" weightage="50" keywordseo="coc" source="Orion">CoC</keyword> of FRL, categorised the business of the corporate debtor in five clusters," as per the new EoI. CIRP was initiated against FRL by its lender Bank of India following loan defaults. Under the Insolvency &amp; Bankruptcy Code, EoI was invited from prospective bidders on October 4, 2022. FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, and Foodhall. At its peak, FRL was operating more than 1,500 outlets in nearly 430 cities. It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713 crore deal announced in August 2020. However, lenders had rejected the takeover of the 19 Future group companies, including FRL, by Reliance amid a legal challenge by Amazon. Last year in August, stock market regulator Sebi ordered a forensic audit of the accounts of FRL for the financial years 2019-20, 2020-21 and 2021-22. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/vedanta-resources-cuts-gross-debt-by-usd-1-billion/articleshow/99731225.cms">Vedanta Resources cuts gross debt by USD 1 billion</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/five-popular-investments-under-80c-in-2023-24/articleshow/99732870.cms">5 popular deductions you can claim under Section 80C in 2023-24</a>

Future Retail insolvency process: 48 cos selected as eligible prospective bidders

New Delhi, The government is preparing to amend the <keyword id="128499" type="General" weightage="100" keywordseo="insolvency" source="Orion">insolvency</keyword> law as it looks to reduce the time taken for completion of resolution process of stressed assets and prevent significant erosion of value of the assets, according to a senior official. Amendments to the Insolvency and Bankruptcy Code (<keyword id="192838" type="General" weightage="80" keywordseo="ibc" source="Orion">IBC</keyword>), which came into force in 2016 for timely resolution of stressed assets, are likely to be introduced in the <keyword id="6358021" type="General" weightage="50" keywordseo="budget" source="Orion">Budget</keyword> session of <keyword id="6354721" type="General" weightage="50" keywordseo="parliament" source="Orion">Parliament</keyword> early next year. The corporate affairs ministry's move to amend the law also comes against the backdrop of concerns in various quarters that many of the corporate insolvency resolution processes are taking a longer time due to litigations and other issues despite a stipulated time frame in place. The senior government official told PTI that consultations are going on with various stakeholders, including bankers and lawyers, and the changes are expected to be finalised in the coming weeks. The focus is on how to speed up the whole resolution process by reducing the time taken. One of the options being looked at is how fast a company undergoing the resolution process can be handed over to the winning bidder as that would help in preserving the value of the assets concerned, the official said. As per IBC, a company's affairs are taken care of by an insolvency resolution professional till the winning bidder takes over. To ensure that there is no significant value erosion, the amendments will look at putting in place provisions whereby the assets can be handed over to the winning bidder at the earliest, the official said. On the basis of data from the Insolvency and Bankruptcy Board of India (IBBI) till the end of September this year, the ministry informed the <keyword id="6355187" type="General" weightage="50" keywordseo="lok-sabha" source="Orion">Lok Sabha</keyword> on December 12 that a total of 553 cases have been resolved under IBC and the average time taken for the resolution was 473 days. In the current fiscal up to September, 57 cases were resolved under IBC and the average time taken was 679 days. The higher time taken for resolution is mainly on account of associated litigation as with time, the average number of interlocutory applications has increased, which is considered to impact realisable value of assets, the ministry told the Lower House. As per the data, it took an average of 560 days to resolve 143 cases in 2021-22, while the average time taken was 468 days to resolve 120 cases in 2020-21. In 2017-18, 19 cases were resolved and the average time taken was 230 days, and in 2018-19, 78 cases were resolved at an average time of 326 days. In 2020-21, as many as 120 cases were resolved and the average time taken was 468 days. The IBC time frame for the resolution process is 330 days, inclusive of time taken for litigation. As per the IBBI data, the 517 cases that yielded resolution plans took an average of 460 days for conclusion till the end of June while the recovery rate for creditors against the claims made was around 31 per cent. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/i-am-glad-i-fd-up-so-much-in-life-that-it-is-content-now-says-ankur-warikoo/articleshow/96282722.cms">I am glad I F**%*D up so much in life that it is content now says Ankur Warikoo</a> <a href="https://www.businessinsider.in/careers/news/tech-layoffs-surpass-great-recession-levels-set-to-get-worse-in-early-2023/articleshow/96314678.cms">Tech layoffs surpass Great Recession levels, set to get worse in early 2023</a>

Govt to amend insolvency law to reduce time taken for resolution process

The <keyword id="6354457" type="General" weightage="50" keywordseo="national-company-law-tribunal" source="Orion">National Company Law Tribunal</keyword> (<keyword id="6355809" type="General" weightage="100" keywordseo="nclt" source="Orion">NCLT</keyword>) on Wednesday admitted Go First's voluntary plea to initiate the insolvency resolution process against the airline. A two-member bench comprising President Justice Ramalingam <keyword id="198622" type="General" weightage="50" keywordseo="sudhakar" source="Orion">Sudhakar</keyword> and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden company. It has also put the company under the protection of a moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings. Besides, NCLT also ordered to keep the company as a going concern and ensure that no employees are retrenched. On May 4, the NCLT reserved its order after hearing the <keyword id="7629" type="General" weightage="50" keywordseo="wadia" source="Orion">Wadia</keyword> group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection. Go First, which has been flying for more than 17 years, stopped flights on May 3 amid a financial crunch caused by the grounding of more than half of its fleet due to non-availability of Pratt &amp; Whitney engines. With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations. Go First has already suspended the sale of tickets till May 15. As many as 28 planes or more than half of the airline's fleet are grounded due to the non-supply of engines by Pratt &amp; Whitney (P&amp;W). The lessors of the carrier have opposed Go First's plea for an interim moratorium contending that it would have "harmful and serious consequences". Besides, Go First is facing two more petitions seeking insolvency proceedings against it. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/tv-audience-is-growing-in-complexity-as-idiot-box-turns-smart/articleshow/100122882.cms">TV audience is growing in complexity as idiot box turns smart</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/mankind-pharma-debuts-in-top-100-as-per-market-value-after-a-stellar-listing/articleshow/100123765.cms">Mankind Pharma enters top 100 companies by market cap after a stellar listing</a>

NCLT admits Go First's plea to initiate insolvency resolution

With the debt recoverable rate going down to 30.8 per cent or Rs 243,452.5 crore (lenders foregoing Rs 70 per cent of their admitted claims of Rs 790,626.2 crore) the number of cases admitted for Corporate <keyword id="128499" type="General" weightage="100" keywordseo="insolvency" source="Orion">Insolvency</keyword> Resolution Process (CIRPs) has increased since the launch of the Insolvency and Bankruptcy Code in 2016, said <keyword id="6431877" type="General" weightage="80" keywordseo="care-ratings" source="Orion">CARE Ratings</keyword>. The report also said the trend in the loan recovery rate is also going down. In a research report, CARE Ratings said after slowing in H2FY21 and FY22, the number of insolvency cases increased by 24 per cent y-o-y in Q2FY23. "However, despite the increase, the number of cases admitted to the insolvency process continued to be lower compared to earlier quarters in FY19/20. The distribution of cases across sectors has remained broadly similar, compared to earlier periods," CARE Ratings said. According to the report, the overall recovery rate till Q2FY23 was 30.8 per cent implying a haircut of approximately 70 per cent. "However, the cumulative recovery rate has been on a downtrend, decreasing from 43 per cent in Q1FY20 and 32.9 per cent in Q4FY22 as larger resolutions have already been executed and a significant number of liquidated cases were either <keyword id="155128" type="General" weightage="50" keywordseo="bifr" source="Orion">BIFR</keyword> (<keyword id="149218" type="General" weightage="50" keywordseo="board-for-industrial-and-financial-reconstruction" source="Orion">Board for Industrial and Financial Reconstruction</keyword>) cases and/or defunct with high-resolution time," the CARE Ratings report notes. The number of cases admitted for Corporate Insolvency Resolution Process (CIRPs) has increased each quarter since the launch of the Insolvency and Bankruptcy Code (<keyword id="192838" type="General" weightage="50" keywordseo="ibc" source="Orion">IBC</keyword>) in 2016., highlighting the rising acceptance of IBC as an effective debt resolution mechanism. The admission of cases has increased y-o-y in Q2FY23 by around 24 per cent after reducing in the last few quarters in FY21 and FY22, however, despite the increase, the number of cases admitted to the insolvency process continues to be lower compared to earlier quarters in FY19/20. According to CARE Ratings, the IBC has continued to gain in popularity, with close to 6,000 companies being admitted and a significant number of these cases on a cumulative basis being filed by the financial creditors (2,531 cases) and the operational creditors (3,008 cases). As of September 2022, the share of financial creditors has decreased, while that of operational creditors has increased. The share of corporate debtors has continued to remain the smallest over the same period. The share of the various sectors has largely remained constant compared with the previous period. The manufacturing sector accounts for the highest share at 39 per cent of the overall cases, followed by the real estate (21 per cent), construction (11 per cent) and trading sectors (10 per cent), the credit rating agency said. As regards the status of the cases under the Corporate Insolvency Resolution Process (CIRP), it remained constant compared with the previous period. Out of 5,889 cases admitted into CIRP at the end of 30.9.2022, only 9 per cent have ended in approval of resolution plans, while 33 per cent remain in the resolution process versus 35 per cent as of the end of March 2022, the report said. A total of 1,807 have ended in liquidation (31 per cent of the total cases admitted). Meanwhile, 76 per cent of such cases were either BIFR cases and/or defunct. "Around 14 per cent (846 CIRPs) have been closed on appeal /review /settled, while 11 per cent have been withdrawn under Section 12A. A significant number of withdrawn cases (around 54 per cent) were less than Rs 1 crore, while the primary reason for withdrawal has been either the full settlement with the applicant (40.6 per cent) or other settlement with creditors (24 per cent)," CARE Ratings said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/icici-bank-launches-digital-lending-solution-ilens-powered-by-tcs/articleshow/95849140.cms">ICICI Bank launches digital lending solution iLens, powered by TCS</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-gains-8-paise-to-81-60-against-us-dollar/articleshow/95850197.cms">Rupee gains 8 paise to 81.60 against US dollar</a>

Financial creditors forego Rs 790.626 cr under insolvency resolution process: CARE Ratings

The <keyword id="6396354" type="General" weightage="20" keywordseo="National-Company-Law-Appellate-Tribunal" source="Orion">National Company Law Appellate Tribunal</keyword> (<keyword id="6396355" type="General" weightage="20" keywordseo="NCLAT" source="Orion">NCLAT</keyword>) has approved the Resolution Plan submitted by <keyword id="47654" type="General" weightage="20" keywordseo="ArcelorMittal" source="Orion">ArcelorMittal</keyword> for the corporate <keyword id="5980144" type="General" weightage="20" keywordseo="insolvency-resolution-process" source="Orion">insolvency resolution process</keyword> of <keyword id="6327485" type="General" weightage="20" keywordseo="Odisha-Slurry-Pipeline-Infrastructure" source="Orion">Odisha Slurry Pipeline Infrastructure</keyword> Limited. Giving a major relief to the world's leading steel company, a Bench comprising HMJ Jarat Kumar Jain (Member Judicial) and Kanthi Narahari (Member Technical) of the National Company Law Appellate Tribunal, New Delhi on Tuesday dismissed the various appeals challenging the approval of the Resolution Plan filed by ArcelorMittal for the corporate insolvency <keyword id="6399250" type="General" weightage="20" keywordseo="resolution-process" source="Orion">resolution process</keyword> of Odisha Slurry Pipeline Infrastructure Limited. Earlier, the Ld Adjudicating Authority, Cuttack on March 2, 2020, approved the resolution plan of ArcelorMittal India Private Limited pursuant to the unanimous approval by the Committee of creditors in respect thereof and rejected all the objections raised in this regard by the various stakeholders/creditors. Senior Advocates Harish N. Salve and Neeraj Kishan Kaul appeared and argued on behalf of ArcelorMittal Group. The ArcelorMittal Group was advised and represented by a legal team comprising Ruby Singh Ahuja, Vishal Gehrana, Ashutosh Shukla and Varun Khanna from Karanjawala &amp; Company, Sudhir Sharma and Naman Bagga from L&amp;L Partners and Ashim Sood, Advocate. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/union-defence-budget-2022-submarines-drones-warships-and-aircraft-carriers/articleshow/88989045.cms">This year’s defence budget may focus on building submarines, drones, warships and aircraft carriers</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/ags-transact-technologies-ipo-cash-management-firm-looking-to-halve-its-debt-with-ipo-money/articleshow/88987025.cms">AGS Transact is a cash management firm looking to halve its debt with IPO money</a>

NCLAT approves resolution plan for Odisha Slurry Pipeline Infra

<ul><li>The cumulative recovery rate has been on a downtrend, decreasing from 43% in Q1FY20 and 32.9% in Q4FY22. </li><li>The number of cases admitted for insolvency resolution has increased y-o-y in Q3FY23 by around 25%. </li><li>Of the total 6,199 cases admitted into CIRP at the end of December 2022, only 10% have ended in approval of resolution plans. </li></ul>The overall recovery rate in <keyword id="5289100" type="General" weightage="20" keywordseo="insolvency-cases" source="Orion">insolvency cases</keyword> till Q3FY23 was 30.4% implying that lenders took a haircut of approximately 70%, according to a report by CareEdge, a credit rating company. The cumulative recovery rate has been on a downtrend, decreasing from 43% in Q1FY20 and 32.9% in Q4FY22 as larger resolutions have already been executed. A significant number of liquidated cases were either Board for Industrial and Financial Reconstruction (BIFR) cases and/or defunct with high resolution time, coupled with lower recoverable values. The number of cases admitted for Corporate Insolvency Resolution Process (CIRPs) has increased y-o-y in Q3FY23 by around 25% after reducing in the last few quarters in FY21 and FY22 which saw a slowdown due to the pandemic. Despite the increase, the number of cases admitted to the insolvency process continues to be lower compared to earlier quarters in FY19/20. The number of cases admitted for CIRPs has increased each quarter since the launch of the Insolvency and Bankruptcy Code in 2016, highlighting the rising acceptance of IBC as an effective debt resolution mechanism. IBC has continued to gain in popularity, with close to 6,200 companies being admitted and a significant number of these cases on a cumulative basis till December 2022 being filed by the financial creditors (2,692 cases) and the operational creditors (3,133 cases). The share of corporate debtors has continued to remain the smallest over the same period. Of the 2,000 ongoing CIRPs, there has been a delay of more than 270 days for the completion of the process of 64% of ongoing CIRPs in December 2022 which is a decline of 9% as compared to 73% in December 2021. Further, the report observes that the ‘more than 180 days but less than 270 days’ segment is the second largest indicating that quite a few cases which had commenced in the earlier quarters have piled up, while the other two categories continue to have quite a few cases in them highlighting the significant delays in the process.

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Congress criticises SBI's decision to convert SIIL debt into equity, urges RBI intervention

BI India Bureau