Creditors Recovered 195% Of Liquidation Value Of Cos. Under IBC: IBBI Chief, Dr M.S. Sahoo
Creditors have received 195 per cent of the liquidation value of the companies which found resolution under the Insolvency and Bankruptcy Code (IBC), Dr M.S. Sahoo, chairperson, Insolvency and Bankruptcy Board of India (IBBI) said at an ASSOCHAM event in New Delhi.
“As of now, i.e. up to March, creditors have got 195% of the liquidation value i.e. the company has been rescued thereafter creditors have got 195% of liquidation value, if you get anything above liquidation value is actually a bonus and that has come because of IBC,” said Dr Sahoo at an ASSOCHAM National Conference on Insolvency & Bankruptcy Code.
He was responding to journalists’ questions on whether the amount of haircut being taken by the banks is a matter for concern for policymakers.
On being asked about the differentiation between financial and operational creditors, he said, “Our experience has been, up to December data which we had submitted to SC earlier, both operational and financial creditor on an average had got about 48 per cent each of their claims.”
He added, “In fact, financial creditor got 48.1 per cent and operational creditor got slightly better. But now figures have changed, particularly we are waiting for resolution of Essar, because there is a huge figure which would change ratios.” He further said that as long as there is no ruling over and above the NCLAT that remains the law.
Mr Vineet Agarwal, Vice President, ASSOCHAM said, It is heartening to note that the government has been proactive in taking feedback from stakeholders. We believe the changes will support the overall governance framework and quicken resolution of NPAs.
While addressing the conference, Hon’ble Justice M.M. Kumar, President, National Company Law Tribunal (NCLT) said that IBC has created paradigm shifts as the borrower are no longer calling the shots, the control has grown in the hands of creditors guided by resolution professionals.
He also stressed that resolution professionals must be more equipped and a full of knowledge.
In his address, Hon’ble Justice S.J. Mukhopadhayay said that IBC is for present and future and so let the corporates, resolution professionals and all other stakeholders should ensure there is no ‘death.’