Skip to main content

Banks to refer 25 firms on RBI’s second list to NCLT

Banks to refer 25 firms on RBI’s second list to NCLT
Videocon, Anrak Aluminium, Jayaswal Neco Industries among total 28 firms on list
Lenders have decided to refer 25 of 28 companies on the Reserve Bank of India’s second list of large corporate defaulters to the National Company Law Tribunal (NCLT) for initiation of insolvency proceedings.Among the 28 companies are Videocon Industries, Anrak Aluminium and Jayaswal Neco Industries, companies where bankers had sought an extension in deadline to finalize a resolution plan.
These 28 companies are on RBI’s second list of defaulters sent to banks in late August.The central bank directed banks to finalize resolution plans for them by 13 December, failing which they had to refer them to NCLT by December end.
The central bank, in its letter to banks, clarified it has not extended the 13 December deadline to favour a few cases, according to three people with knowledge of the matter. Mint has not reviewed the letter.RBI sent its first list of 12 large defaulters to banks in June. Its second list of troubled firms accounts for Rs2 trillion in bad loans.
To be sure, petitions under the Insolvency and Bankruptcy Code have been filed against some companies on the list such as Ruchi Soya, Nagarjuna Oil, IVRCL, Orchid Pharma and Castex Technologies.Accordingly, a total of 25 cases will undergo insolvency proceedings, according to the people cited above who did not want to be identified. In the case of Videocon Industries, consortium leader State Bank of India (SBI) was awaiting a rating before finalizing a resolution plan.
Venugopal Dhoot, chairman and managing director of Videocon, said the total debt of Videocon Industries and Videocon Telecommunications that will be referred to NCLT stands at Rs22,000 crore.“Considering the strong brand portfolio, large manufacturing base and very wide distribution network, we feel the business is very valuable and will fetch good valuation for lenders,” Dhoot said.
In the case of Anrak Aluminium, lenders were looking at a one-time settlement, which has been rejected by the regulator.An email sent to Anrak Aluminium did not elicit any response at the time of going to press.Jaiprakash Associates, BILT Graphic Paper Products Ltd and Soma Enterprises are the only companies where banks have finalized a resolution outside NCLT.
In the case of Jaiprakash Associates, lead banker ICICI Bank Ltd has been in talks with promoters to sell assets and repay debt. The plan involves deep restructuring of the account. Stand-alone debt of the company stood at Rs25,587 crore as of end March.Lenders, therefore, expect the regulator to give its approval for a resolution package.
In these three cases, while RBI has given its go-ahead to a resolution plan, its approval is conditional on lenders meeting certain requirements before 31 December, said one of the three people cited above.“The decision to not extend the deadline shows the firm stance of the regulator to resolve the distress in the system. But one has to watch how the timelines are met. First, we will have to watch out for the timelines because IBC cases in RBI’s first list are struggling to meet the 180-day deadline and have sought approval for an additional 90 days to finalize resolution plans
Second, the IBC ordinance has shrunk the pool of resolution applicants, and this could prove challenging in resolving cases in the second list,” said Aashit Shah, partner at law firm J. Sagar Associates.
The Mint, New Delhi, 30th December 2017


Popular posts from this blog

Deposit gush:-CA Institute Bats for Special Audit

Obligation for the Month of May 2017

Obligation for the Month of May 2017 Event DateActApplicable FormObligation6-May-2017Service TaxChallan No.GAR-7E-Payment of Service Tax for April by Cos7-May-2017Income TaxForm No.27C (TCS)Submission of Forms received in Apr  to IT Commissioner7-May-2017Income TaxChallan No.ITNS-281Payment of TDS/TCS deducted/collected in Apr10-May-2017ExciseER-1Return for Non SSI assessees for Apr10-May-2017ExciseER-2Return for EOUs for Apr10-May-2017ExciseER-6Return by units paying duty >  1 crore (CENVAT + PLA) for Apr12-May-2017D-VATBE - 2Advance information for 2nd fortnight of May of functions with booking cost > Rs 1 lakh in Banquet Halls,hotels etc. in Delhi15-May-2017D-VATDVAT-20Deposit of DVAT TDS for  Apr15-May-2017Income TaxForm 27EQTCS Returns by ALL Collectors15-May-2017Providend FundElectronic Challan cum Return (ECR)E-Payment of PF for Apr15-May-2017D-VATDVAT-48 Return of DVAT TDS for quarter ending March21-May-2017ESIESI ChallanPayment of ESI of Apr21-May-2017M-VATMVAT ChallanPa…

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …