Insolvency and Bankruptcy Code 2016 (IBC)

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IBC Second Amendment Bill 2019

The edifice of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was conceptualised on ideas such as promoting ‘maximisation of value of assets’, ‘a transparent and predictable insolvency law’,  ‘avoiding destruction of value of the debtor’ and recognising the difference between ‘malfeasance and business failure’.[1] In the three years since the enactment of the IBC, many areas in the insolvency resolution process  have required judicial and legislative interventions to enable the process to achieve the desired results.

Among others, the ongoing investigations against insolvent entities and the risk of cancellation of critical government contracts during the insolvency process, were identified as key impediments to strategic interest in the stressed market. The introduction of the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 (“Bill”), by the Government, is a step that will help overcome such ‘critical gaps in the corporate insolvency framework’.[2]
Continue Reading IBC Second Amendment Bill, 2019: Finishing Touches to the Indian Restructuring Landscape

Essar Steel India Limited - Supreme Court reinforces primacy of Creditors Committee in insolvency resolution

Essar Steel judgement of the National Company Law Appellate Tribunal (NCLAT), which required that the secured financial creditors share recoveries in a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC), inter se (irrespective of the ranking of their security positions) and with the trade creditors, on a pari passu basis, was considered a ”confusion in the different types of creditors” and a setback for the nascent but growing secondary debt market in India. The judgement perhaps was also opposed to the realities of credit risk assessments and pricing of the credit leading to an unsatisfactory resolution outcome for creditors in an insolvency situation.
Continue Reading Essar Steel India Limited: Supreme Court Reinforces Primacy of Creditors Committee in Insolvency Resolution

Private Equity Blog - Control Deals Acquisition

Private equity (PE) investors have traditionally invested in the Indian marketplace as ‘financial investors’, acquiring a minority stake in their target with negotiated contractual rights to oversee their financial investments.

The past few years have borne witness to the trend of acquiring “controlling stakes” in the target. Data gathered from public sources suggest that the total value of control deals in India went up from USD 4.8 billion in 2017 to USD 5.9 billion in 2018.
Continue Reading Is Private Equity the New ‘Strategic’? Control Acquisitions are Here to Stay!

Tender offers in India 2018

January to December 2018 was a more active year compared to 2017 for tender offers made under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations).

Non-banking financial companies (NBFCs) saw a particularly high number of tender offers. These included tender offers for Tourism Finance Corporation of India Limited, Pranami Credits Limited and LKP Finance Limited. But while the NBFC space may have had the greatest number of tender offers, the highest tender offers in terms of size/value were in banking (IDBI Bank Limited), healthcare (Fortis Healthcare Limited), pharmaceuticals (Merck Limited), and cable & broadband (Hathway Cable and Datacom Limited and Den Networks Limited) sectors.
Continue Reading Tender Offers in 2018: The Year That Was