Expressing concern over non-payment of the Adjusted Gross Revenue (AGR) related dues by the telecom companies which are under insolvency, the Supreme Court on Thursday said "without paying for the horse, telecos are taking a ride,” Deccan Herald reported. The apex court said it is “extremely worried” that almost the entire AGR dues will be “wiped out” in the IBC process. The top court wondered can a liability like AGR related dues be wound up, under the guise of selling spectrum under the Insolvency and Bankruptcy Code (IBC).
India
Read more
A 8,764% surge in the shares of a company with a minuscule public shareholding has prompted India’s regulator to consider changing its rules for firms emerging from the nation’s bankruptcy process, Bloomberg News reported. The Securities & Exchange Board of India has sought comments on a proposal to cut the time given to companies that re-list after bankruptcy resolution to boost the free float to at least 10% within six months from 18 months currently.
The National Company Law Appellate Tribunal (NCLAT) has ruled that home-buyers cannot drag realty companies through the insolvency process for recovering monies awarded to them by a real estate regulator, The Hindu Business Line reported. The NCLAT ruled that a home-buyer cannot be treated as a financial creditor when the real estate company is unable to honour a decree awarded by the State-level Real Estate Regulatory Authority (RERA). Home-buyers need to take recourse to the civil law to recover the money.
AZB & Partners and De Brauw Blackstone Westbroek advised the resolution professional managing the insolvency of Jet Airways when the airline sold two floors of a Mumbai building to a company controlled by Brookfield Asset Management, the Indian Business Law Journal reported. Khaitan & Co advised Brookfield. The National Company Law Tribunal (NCLT) had given the go-ahead for the ₹4.9 billion (US$65 million) sale after both HDFC, to which Jet Airways had mortgaged the premises, and the committee of creditors of Jet Airways had approved it.
Indian lenders rushed to be included in a case involving recovery of $19 billion of past dues from telecom companies after a Supreme Court judge questioned banks’ right to sell insolvent carriers’ airwaves, Bloomberg News reported. Lenders led by State Bank of India in a plea said any move to ban bankrupt companies such as Aircel Ltd. and Reliance Communications Ltd. from selling airwaves, leased from the government, will sink their insolvency resolution process and can cause serious prejudice to lenders, according to people aware of the filing.
Lenders to bankrupt Reliance Communications Ltd (RCom) and Reliance Telecom Ltd (RTL) have told the Supreme Court that spectrum is an essential and integral part of asset against which banks grant loans to telecom firms, Mint reported. This is contrary to the government’s stance that spectrum is national property and cannot be sold under insolvency proceedings.
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.
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.
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.
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.