NCLAT directs 22 IL&FS Group companies to service debt obligations

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SME Times News Bureau | 11 Feb, 2019
A top corporate appellate tribunal on Monday lifted the moratorium imposed on 22 firms belonging to the debt-stricken Infrastructure Leasing and Financial Services (IL&FS) Group to service their respective payment obligations.

Additionally, it lifted the moratorium on debt repayments by 133 offshore group entities.

On October 15 last year, the National Company Law Appellate Tribunal (NCLAT) had allowed IL&FS and its 348 group entities to halt debt repayments until a resolution plan was worked out.

Accordingly, the NCLAT on Monday lifted the moratorium on the companies that have been categories under the green entities. Earlier, it had imposed a 90-day moratorium on loan recovery from the subsidiaries of the debt ridden group.

Subsequently, a classification of entities into "Green", "Amber" and "Red" has been done by the resolution consultant appointed by the new Board based on a 12-month cash flow based solvency test.

Till now out of 169 companies of the group that have been incorporated in India, only 69 have been classified into the three categories.

As per the classification norms, "Green" entities are those companies which can service their debt obligations while firms in "Amber" group can partly meet their obligations and "Red" are those which cannot make any payment obligations.

The group also has 133 entities which have been incorporated or located outside the country's jurisdiction.