NCLT call for fresh batch

Mumbai: At least 25 companies on the RBI's second list of defaulters are being sent to the National Company Law Tribunal (NCLT) for insolvency proceedings.

The deadline for finding a resolution in these 28 cases ended in the middle of last month and banks had time till the end of December to refer them to the NCLT.

It is learnt that of the 28, banks have been successful in finding resolution (outside the NCLT) in at least two cases - BILT Graphic Paper Products and Soma Enterprises.

Jaiprakash haze

There is, however, no clarity on whether Jaiprakash Associates (which has an estimated debt of over Rs 25,000 crore) has been referred to the NCLT.

This is because lenders, led by lead banker ICICI Bank, are understood to have finalised a resolution plan and have been waiting for a nod from the central bank to keep it outside the bankruptcy process. It is not known if the RBI has accepted their request.

Among the large accounts to go to the NCLT are Videocon Industries with a debt of over Rs 20,000 crore, Jayaswal Neco Industries, Asian Colour Coated Ispat and Essar Projects.

The RBI had first put out a list of 12 accounts in June last year of which 11 are under the NCLT. The exposure here was worth a quarter of over the Rs 8-lakh-crore bad loans in the system. This was followed by a second list in July. It is estimated these cases account for around 15 per cent of the banking system's NPAs

According to the central bank, since the NCLT was set up 18 months ago, over 4,300 cases have been filed at its various benches for resolution.

The insolvency and bankruptcy code came into existence with the enactment of the Insolvency and Bankruptcy Code (IBC) in May 2016, replacing the Company Law Board regime.

The RBI said in its Financial Stability Report (FSR) that of the 4,300 cases, more than 500 applications seeking admission for insolvency proceedings were rejected, dismissed or withdrawn. Around 470 cases admitted by the tribunal are at various stages of the insolvency process.

Market watch

While the current calendar year should see a resolution in these accounts, the stock markets has over the past few days witnessed increased investor interest in some of the stressed cases that have been referred to the NCLT.

This follows Reliance Communications (R-Com) announcing a major resolution plan last week that is expected to help it exit from the strategic debt restructuring mechanism. As part of this process, the Anil Ambani sold a part of its wireless assets to Reliance Jio for an estimated amount of Rs 25,000.


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