India

The insolvency case of Era Infra Engineering, one of the 12 large loan default cases referred to National Company Law Tribunal (NCLT) for insolvency proceedings by Reserve Bank of India (RBI), is unlikely to see any resolution this year, say sources involved with the resolution process, Business Today reoprted. The Era Infra case was referred to NCLT in June 2017 with 11 other cases including the likes of Essar Steel, Bhushan Steel, Lanco Infratech and Jaypee Infra.

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The National Company Law Appellate Tribunal (NCLAT) has set aside a plea challenging an NCLT order that rejected the petition to initiate insolvency proceedings against Tata Chemicals for claimed operational debt of Rs 68.44 crore, CNBC-TV18 reported. A three-member NCLAT bench upheld the order of the Mumbai bench of the National Company Law Tribunal (NCLT) that dismissed the plea of Allied Silica to initiate insolvency proceeding against the Tata group firm.

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The Indian Supreme Court has asked, in a recent hearing, a question that does not appear to have occurred to India’s Department of Telecommunications (DoT): how does it plan to recover adjusted gross revenue (AGR)-related dues from telecom companies facing insolvency? In addition the court wants to ascertain the bona fides of the telecom companies that have initiated insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) – that is, why some of these companies have done so and what their liabilities are, Developing Telecoms reported.

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A one-time debt restructuring allowed by India’s central bank to help lenders and borrowers amid the COVID-19 pandemic will prolong uncertainty about the banking sector’s asset quality, Fitch Ratings said on Tuesday, Reuters reported. India’s central bank said last week it will allow restructuring of corporate and personal loans to ease debt strains on companies and lenders, a move widely awaited by the banking industry.

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The Supreme Court on Monday asked Department of Telecom (DoT) to apprise it as how it plans to recover Adjusted Gross Revenue (AGR) related dues from telecom companies facing insolvency proceedings and whether spectrum given to these companies can be sold, Business Standard reported. DoT told the top court that their stand is that the spectrum cannot be sold by the telecom companies facing insolvency proceedings as it not their property.

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Pre-dominance of cash transactions, independence of directors and frequent changes of auditors are among the potential red flags for insolvency professionals in detecting avoidance transactions during insolvency proceedings, according to an IBBI document, ETRealty reported. Under the Insolvency and Bankruptcy Code, resolution professionals and liquidators are required to determine whether corporate debtors concerned were subject to avoidance transactions. The Code provides for a time-bound and market-linked resolution of stressed assets.

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The National Company Law Appellate Tribunal (NCLAT) has upheld an NCLT order setting aside a plea to initiate insolvency proceedings against Gujarat Ambuja Exports Ltd, Business Standard reported. A three-member NCLAT bench upheld the order of the Ahmedabad bench of the National Company Law Tribunal (NCLT), which had set aside the plea of Samay Impex, an operational creditor of Gujarat Ambuja Exports Ltd (GAEL).

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The true financial cost of Covid-19 is something India would rather not acknowledge, let alone bear — at least not until the pandemic has played out. That explains why the central bank on Thursday allowed a one-time restructuring of corporate and personal loans that have been under stress ever since Prime Minister Narendra Modi put the country under a severe lockdown in March, Bloomberg News reported in a commentary. Those nationwide restrictions have given way to more localized containment. But with India becoming only the third country after the U.S.

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Vodafone Idea Ltd., the beleaguered Indian wireless carrier facing a government demand for billions of dollars in back fees, reported an eighth straight quarterly loss and said a court verdict on a staggered payment plan for the dues is critical for survival, Bloomberg News reported. Net loss was 254.6 billion rupees ($3.4 billion) in the three months ended June, the country’s No. 3 mobile phone carrier said Thursday. It took a one-time charge of 194.4 billion rupees for back fees paid.

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India’s banking regulator gave lenders power to restructure certain loans, as authorities look to support an economy hit by the pandemic while ensuring the stability of a financial sector where bad-debt is set to swell to a two-decade high, Bloomberg News reported. Ahead of the expiry of a blanket loan moratorium later this month, the Reserve Bank of India said it will permit banks to strike rescheduling agreements with borrowers that were on track to repay their loans on March 1, in the early days of the coronavirus outbreak.

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