In a relief to lenders of crisis-hit
IL&FS, the National Company Law Appellate Tribunal (NCLAT) on Monday released 22 domestic and 133 overseas companies of the group to make scheduled repayments to lenders.
Earlier, the NCLAT had imposed a 90-day moratorium on loan recovery from the subsidiaries of the debt ridden group.
A two-member bench of NCLAT headed by Justice S J Mukhopadhaya has taken the decision after the government submitted a list of IL&FS group companies along with their categorisation based on their respective financial positions to pay their debt.
During the hearing, solicitor general of India Tushar Mehta appearing for the ministry of corporate Affairs submitted a list of 302 subsidiaries of IL&FS, which are jointly controlled entities, group companies and associates forming part of IL&FS group companies.
Out of 302 companies, 169 companies are incorporated in India and the remaining 133 are incorporated outside India, he added.
He further informed the NCLAT that out of 169 domestic companies, classification process under Green, Amber and Red categories has been completed for 69 firms as on February 9, 2019.
Out of 69, the government has marked 22 companies under Green, 10 in Amber and rest 38 in Red category.
Companies falling in the green categories are the entities, which will continue to meet their payment obligation. While companies falling in amber category are those who are not able to meet their obligations but can meet only operational payment obligations to senior secured financial creditors. Companies falling in the red category are the entities which can not meet their payment obligations towards even senior secured financial creditors,"
The NCLAT has also approved the appointment of retired Supreme Court judge Justice D K Jain to supervise the debt resolution plan.
As per the terms and agreement, Justice Jain will get a monthly remuneration of Rs 10 lakh per month and Rs 2.5 lakh per sitting, besides other expenses, which would be paid by IL&FS.
During the hearing, senior lenders such as Indusind Bank, L&T Finance and Aditya Birla & Capital Fund opposed the government's plea to make the Amber and Red companies to make payment necessary only to maintain and preserve their going concern status.
Senior advocate Abhishek Manu Singhvi, appearing for Indusind Bank submitted that any such payment would have a great cascading effect on the NPAs of the top five lenders of the group companies.
The major group companies which are in green list include - IL&FS Investment Manager, IL&FS Security service, IL&FS Paradip Refinery Water, Tamil Nadu Water Investnent, IL&FS Asian Infrastructure Manager, IL&FS Urban Infrastructure Manager, IL&FS Infra Asset Management, North Karnataka Expressway, IL&FS Solar Power, Tadas Wind Energy, Khadke Wind Energy, Etesian Urja,Kaze Energy, Wind Urza India, Maytas Logiparks, Lalpur Wind Energy, Jharkhand Infrastructure Invest Company, IIML Asset Advisors, and IISL Settlement & Transmission Services.
On February 4, the government had also submitted the debt resolution plan for crisis-hit IL&FS to the NCLAT and suggested the name of D K Jain to supervise the entire process.
According to the resolution plan, suitable eligibility criteria will be stipulated, approved by the newly appointed directors and then expression of interests will be invited for the same.
It further added that upon receipt of the recommendations, a successful bidder would be declared, who will deposit the earnest money.
Upon declaration of the successful bidder, documentation of the sale will be completed and the forwarded to National Company Law Tribunal for the final approval.
According to the affidavit filed before the NCLAT, the classification of the IL&FS group companies is "based on a 12-month cash flow based solvency test".
In its debt resolution plan, the corporate affairs ministry has fixed September 30, 2018 as the cut-off date for entertaining the claims submitted by the lenders. On October 1 last year, a newly appointed board took over the reins of IL&FS.
With inputs from PTI.