NCLAT seeks details of IL&FS’ dues

By Sarkaritel March 30, 2019 06:32

New Delhi, March 30  The National Company Law Appellate Tribunal (NCLAT) on Friday told the board of the cash-strapped IL&FS to submit details of the group’s dues.

The matter has been adjourned till the next hearing on April 8.

The Delhi-based appellate tribunal also said that there would be no stay on the government’s resolution plan for the companies of IL&FS. However, all steps regarding resolution of the group companies would have to be cleared by the appellate tribunal, it added.

On Friday, the lenders of IL&FS asked the tribunal to direct the “amber” companies to discharge their dues to senior secured financial creditors.

Under the resolution plan, the government has categorised IL&FS group companies into green, amber and red categories based on their financial positions.

Firms classified as “green” would continue to meet their payment obligations, while “amber” category firms can meet only operational payment obligations to senior secured financial creditors. Those under the “red” category are the entities which cannot meet their payment obligations at all.

Further, as the next hearing would take place in April 8 — the next financial year, the banks exposed to the IL&FS debt have also got a breather from provisioning as IL&FS defaults still cannot be declared as non-performing assets (NPA), people in the know of developments said.

As the fiscal calendar changes on March 31, 2019, banks will not need to make provisioning for ILFS defaults as NPAs, at least for now, they said.

The NCLAT in an earlier order restrained banks from categorising their exposure in IL&FS as NPA without its permission.

ILFS, across various companies, has defaulted on around Rs 15,000 crore of loans in this fiscal ended March 31, 2019. This would have entailed provisioning of nearly Rs 5,000-9,000 crore by banks, depending on the norms followed by each bank, in classifying these as NPAs.

The NCLAT, however, has prohibited banks from classifying IL&FS loans as NPA without its permission. The central bank had contested the NCLAT order and sought relief, which was denied by the appellate tribunal.

The RBI plea will now be heard by NCLAT in April 8 along with other things pending in the case.

Last year, the Central government superseded the management of the beleaguered company through a National Company Law Tribunal (NCLT) order and appointed a six-member board led by Uday Kotak, MD and CEO of Kotak Mahindra Bank, to restore its financial solvency.

Key public sector lenders and undertakings, such as the Life Insurance Corporation of India and the State Bank of India, have a 25.34 per cent and 6.42 per cent stake, respectively, in the firm which has around Rs 91,000 crore in long-term debt.

By Sarkaritel March 30, 2019 06:32

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