Latest news with #Insolvency&BankruptcyCode
Time of India
2 days ago
- Business
- Time of India
Recovery rate under IBC improved to 32.76% in Q4 of FY25: CareEdge
Overall recovery rate under the Insolvency & Bankruptcy Code improved to 32.76% in Q4FY25 from 31.39% in Q3FY25, CareEdge said in a report Tuesday. The ratio of resolution to liquidation improved from to 1.89 in Q4FY25 from 0.20 in FY18 even as the average time taken for resolution or liquidation continued to increase for operational creditors (OCs) and financial creditors (FCs), it said. In Q4Y25, the number of cases admitted increased by around 10% YoY even though it is lower than in earlier quarters of FY20, with fewer than 1,000 cases admitted for FY25. Aggregate recovery hovered around 30%, indicating that creditors faced a haircut of around 70% on admitted claims, it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Confidence packed. Wrinkles left behind. Philips Garment Steamers Book Now Undo "Persistent delays, legal hurdles, particularly due to prolonged litigation in National Company Law Tribunal and other forums-and post-resolution disputes hinder effective recovery, especially in complex cases," it said.
Time of India
5 days ago
- Business
- Time of India
NCLT has powers to direct probe into company's affairs in insolvency matters, says NCLAT
Appellate tribunal NCLAT has clarified that the National Company Law Tribunal ( NCLT ) can order an investigation into the affairs of a company by probe agencies in cases related to the Insolvency & Bankruptcy Code by exercising its power under the Companies Act. The NCLAT order came on May 15 over a plea filed by Max Publicity & Communication which had challenged an NCLT order. The Mumbai bench of NCLT, on January 21, 2025, while rejecting an insolvency plea against Max Publicity & Communication, issued a direction to forward a copy of the order to investigative agencies, including the Serious Fraud Investigation Office (SFIO) and Economic Offences Wing (EOW). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Unlock full 2025 solar power in Algeria — install, maintain, upgrade Solar Panels | Search Ads Learn More Undo This was challenged before NCLAT by Max Publicity submitting that no opportunity was given to it to have its say on various adverse observations made against it in the impugned order, which was violation of principle of natural justice. The insolvency plea was filed in NCLT by Max Publicity & Communication's operational creditor claiming debt and default. Live Events The NCLAT (National Company Law Appellate Tribunal) in its latest order, however, said that such orders passed by NCLT under section 213 of the Companies Act, for investigations, can be passed only after complying with preconditions. "The Adjudicating Authority, while exercising jurisdiction under Section 9 of the IBC , also exercise jurisdiction of NCLT under the Companies Act, 2013," said the three-member NCLAT bench, which also comprised Chairperson Justice Ashok Bhushan. Under the IBC (Insolvency & Bankruptcy Code), NCLT is termed as the Adjudicating Authority for resolution and liquidation proceedings. "Adjudicating Authority (NCLT) in exercise of powers under Section 213 of the Companies Act, 2013 can direct for investigation, but the said investigation can be directed after complying with the precondition, i.e. affording a reasonable opportunity to the parties concerned," said NCLAT while modifying the NCLT's order. The appellate tribunal further said that NCLT can also exercise its jurisdiction under Rule 11 of the National Company Law Tribunal Rules, 2016, where it is of the view that a copy of the order needs to be forwarded to the relevant statutory authorities for investigations. "The direction under Section 212 to carry out any investigation of the company's affairs by SFIO can be made only in accordance with the statutory provisions of Section 212 and the Adjudicating Authority, while exercising jurisdiction under the Companies Act 2013, cannot issue any direction to SFIO for carrying out investigation," the NCLAT said. Section 212 of the Companies Act says the central government can direct the SFIO for an investigation into the affairs of a company either on receipt of a report of the registrar or inspector, or on intimation of a special resolution passed by a company that its affairs are required to be investigated. It can also be directed in the public interest or on request from any department of the central government or a state government. Section 213 of the Companies Act, 2013, empowers the NCLT to investigate the affairs of a company if there are grounds to suspect fraud, mismanagement, or oppressive acts. The NCLAT modified the January 21 order of NCLT, saying, "Observations and directions made in paragraphs 65 and 66 are not to be treated any direction for carrying out any investigation by the statutory authorities referred to therein." "There was no occasion to make any observation or referring the matter to EoW or SFIO to investigate and reference of EoW and SFIO in paragraph 65 stands deleted. The direction in paragraph 66 to forward the copy of the order to statutory authorities for taking appropriate steps under the Companies Act, 2013 are upheld," it added.
Time of India
5 days ago
- Business
- Time of India
Debt recovery in stressed realty projects to rise 1,600 bps this fiscal: Crisil Ratings
For asset reconstruction companies (ARCs), the cumulative recovery rate of security receipts (SRs) issued towards stressed real estate projects will increase by 16 percentage points to 38% this fiscal, as per rating agency Crisil. The improvement will ride on robust sales of new units in these projects, backed by steady demand in the residential real estate sector, on the back of strategic debt restructuring facilitated by the ARCs . These findings are based on a Crisil Ratings analysis of 70 stressed real estate projects located in NCR, MMR and Bangalore micro-markets, with SRs issued worth Rs 10,800 crore. Majority of these projects were trapped in a spiralling debt cycle due to falling sales, slow collections and lack of funds to complete construction — most of which are addressed today. Increase in real estate prices and rising demand in the above micro-markets post-pandemic resulting in ramping up of sales have turned these projects viable for funding by external investors, the rating agency said in a note. As per Crisil, demand growth of 7-9% expected in fiscal 2026 for residential real estate in the three micro-markets mentioned above will support the sales for these stressed projects as well. About two-thirds of the rated projects are in the mid-premium segment and above, which are expected to contribute up to 80% of recovery for ARCs driven by stable demand in fiscal 2026. The remaining projects are in the affordable segment which is likely to see modest demand and will contribute lower to recoveries this fiscal. 'Overall, ARCs are expected to see recoveries in stressed real estate projects surge as developers aim to add 2.5 million square feet of inventory this fiscal," said Mohit Makhija, Senior Director, Crisil Ratings. "With 40% of rated projects nearing completion, there is renewed investor interest in at least one-fourth of these projects for last-mile funding, particularly in the premium segment. Incentivising sales at marginally below market prices of near-completion inventory is expected to accelerate sales in these projects.' Crisil says that restructuring of debt has emerged as the preferred resolution strategy for stressed real estate projects, because ARCs can bring down the debt to sustainable levels with an initial moratorium on payments, allowing developers to redirect project cash flow towards construction of units in these projects. Another reason is that restructuring is also favoured by ARCs due to inherent issues in the real estate sector such as two-fold ownership of land and development rights, multiple special purpose vehicle structures with cross-collateralisation and several layers of approval from state authorities, as per Crisil. While restructuring ensures promoters have skin in the game and resolutions are faster, these issues make other strategies such as the Insolvency & Bankruptcy Code (IBC), enforcement and liquidation more time-consuming and thus leading to lower recovery. About 40% of the stressed real estate projects in the Crisil Ratings SR portfolio has undergone restructuring as the primary mode of resolution, resulting in expected nominal recoveries of up to the full principal amount of debt acquired over an 8- year trust life. 'Debt restructuring of stressed projects has significantly improved the viability of projects by right-sizing debt to sustainable levels," said Sushant Sarode, Director, Crisil Ratings. "Construction progress for the stalled projects rated by us is estimated at 80-85% on average within 2.5 years of restructuring. This construction is largely funded by project cash flow, thereby indicating strong sales velocity. The right balance of sustainable debt and steady demand momentum will help fructify efforts of ARCs to turn around some of these stressed projects.'
Hans India
5 days ago
- Business
- Hans India
Debt recovery in stressed realty projects to rise 16 pc in 2025-26: Report
For Asset Reconstruction Companies (ARCs), the cumulative recovery rate of Security Receipts (SRs) issued towards stressed real estate projects will increase by 16 percentage points to 38 per cent during the current financial year, according to a Crisil Ratings report released on Monday. The improvement will ride on robust sales of new units in these projects, backed by steady demand in the residential real estate sector, on the back of strategic debt restructuring facilitated by the ARCs, the report states. The Crisil report is based on an analysis of 70 stressed real estate projects located in NCR, MMR3 and Bengaluru's micro-markets, with SRs issued worth around Rs 10,800 crore. Majority of these projects were trapped in a spiralling debt cycle due to falling sales, slow collections and lack of funds to complete construction — most of which are addressed today. Increase in real estate prices and rising demand in the above micro-markets post-pandemic resulting in ramping up of sales have turned these projects viable for funding by external investors, the report further states. Demand is expected to grow by 7-9 per cent in 2025-2026 for residential real estate in the three micro-markets mentioned above and will support the sales for these stressed projects as well. About two-thirds of the rated projects are in the mid-premium segment and above, which are expected to contribute up to 80 per cent of recovery for ARCs driven by stable demand in fiscal 2026. The remaining projects are in the affordable segment which is likely to see modest demand and will contribute lower to recoveries this fiscal, the report said. According to the report, restructuring of debt has emerged as the preferred resolution strategy for stressed real estate projects for two reasons. One, ARCs can bring down the debt to sustainable levels with an initial moratorium on payments, allowing developers to redirect project cash flow towards construction of units in these projects. Two, restructuring is also favoured by ARCs due to inherent issues in the real estate sector such as two-fold ownership of land and development rights, multiple Special Purpose Vehicle structures with cross-collateralisation and several layers of approval from state authorities. While restructuring ensures promoters have skin in the game and resolutions are faster, the aforementioned issues make other strategies such as the Insolvency & Bankruptcy Code (IBC), enforcement and liquidation more time-consuming and thus leading to lower recovery. About 40 per cent of the stressed real estate projects in the Crisil Ratings SR portfolio have undergone restructuring as the primary mode of resolution, resulting in expected nominal recoveries of up to the full principal amount of debt acquired over an 8-year trust life, the report added.
Time of India
13-06-2025
- Business
- Time of India
NCLT directs insolvency against Gensol, Gensol EV Lease; appoints IRP
The National Company Law Tribunal has initiated insolvency proceedings against Gensol Engineering and Gensol EV Lease following petitions from the Indian Renewable Energy Development Agency due to defaults of ₹510 crore and ₹218.95 crore, respectively. An interim resolution professional has been appointed to manage the affairs of both companies, whose boards have been suspended. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Ind'l Goods/Svs 1. SEPC bags Rs 650 cr solar EPC project in Maharashtra Tired of too many ads? Remove Ads The National Company Law Tribunal on Friday directed to initiate insolvency proceedings against Gensol Engineering and Gensol EV Lease after admitting the petitions filed by the Indian Renewable Energy Development Agency The Ahmedabad bench of the insolvency tribunal appointed interim resolution professionals for both debt-ridden companies after suspending their respective the matter of Gensol Engineering, a two-member NCLT bench said Indian Renewable Energy Development Agency ( IREDA ) has established a financial debt of Rs 510 crore by the company through ledger extracts, TRA statements, demand notices, and NeSL records."The Respondent/Corporate Debtor Gensol Engineering Ltd is admitted in the Corporate Insolvency Resolution Process (CIRP) under section 7 of the IBС, 2016," the National Company Law Tribunal (NCLT) said in a 29-page is engaged in the business of developing and extending financial assistance for setting up projects relating to new and renewable sources of energy and energy efficiency/ another petition filed against Gensol EV Lease by IREDA, the NCLT said a default of Rs 218.95 crore is tribunal has placed Gensol Engineering and Gensol EV Lease under the protection of moratorium as per the provisions of the Insolvency & Bankruptcy Code and appointed Keshav Khaneja as the interim resolution professional (IRP) to run the affairs of the company."The IRP is expected to take full charge of the corporate debtor's assets and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court, hereby, directs the police authorities to render all assistance as may be required by the IRP in this regard," said the NCLT also directed all personnel connected with Gensol Engineering, its promoters, or any other person associated with its management to extend every assistance and cooperation to the NCLT bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Kumar Sharma, has also directed the IRP to submit a "periodical report" on the progress of the CIRP (Corporate Insolvency Resolution Process) in respect of the Corporate Debtor (Gensol).Similarly, for Gensol EV Lease, in the business of leasing electric vehicles and related infrastructure, the NCLT said it had also repayment obligations for the loan taken by Gensol against it were triggered by cross-default clauses linked to payment failures by Gensol Engineering on its May 28, the NCLT ordered to freeze bank and other accounts, restrained the trading of securities and directed asset disclosures of Gensol Engineering and 16 other companies and their was challenged by two Gensol Group entities -- BluSmart Premium Feet and Matrix Gas and Renewable -- before the appellate tribunal NCLAT, which on June 4 directed them to approach the troubles started after an interim order on April 15 by the Securities and Exchange Board of India (SEBI) barred Gensol Engineering and promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from the securities markets till further orders in a fund diversion and governance lapses May 12, the Jaggi brothers resigned from the company following market regulator Sebi's interim order. Anmol Singh Jaggi held the post of Managing Director while Puneet Singh Jaggi was a Whole-time its order on April 15, 2025, the Sebi also barred the Jaggi brothers from holding the position of a director or key managerial personnel in Gensol until further order came after the Securities and Exchange Board of India (Sebi) received a complaint in June 2024 relating to the manipulation of share price and diversion of funds from GEL and thereafter started examining the matter.
