Appellate Tribunal says the order is issued in the interest of the debt resolution plan of the infrastructure company
No bank or financial institution can declare the accounts of debt-ridden IL&FS and its group companies as non-performing assets (NPAs) without NCLAT’s permission, the appellate tribunal said on Monday.
The National Company Law Appellate Tribunal (NCLAT) bench said this has been done in the interest of IL&FS debt resolution plan.
“…we make it clear that due to non-payment of dues by the ‘Infrastructure Leasing & Financial Services Ltd.’ or its entities, including the ‘Amber companies,’ no financial institution will declare the accounts of ‘Infrastructure Leasing & Financial Services Limited’ or its entities as ‘NPA’ without prior permission of this appellate tribunal,” it said.
The direction came after the hearing of an application moved by the government.
The new management of IL&FS is pursuing asset sales to bail out the company and its group entities and pay back its lenders over ₹90,000 crore.
During the last hearing on February 11, NCLAT had allowed IL&FS group’s 22 companies, classified in the green category based on their financial health, to service their debt obligations.
It had also approved the appointment of former Supreme Court judge D. K. Jain to supervise the resolution process. NCLAT had also lifted the moratorium and allowed 133 IL&FS firms incorporated outside India to continue with the resolution process. IL&FS group companies are classified into three groups — green, amber and red.
The companies falling under green category will continue to meet their payment obligation. While the companies which cannot meet their obligations but can meet only operational payment obligations to senior secured financial creditors are classified as amber.
The red category includes those entities which cannot meet their payment obligations towards even senior secured financial creditors.
Meanwhile IL&FS on Monday said four workers of one of its subsidiaries who were held hostage in Ethiopia over non-payment of dues have safely returned to India.
“IL&FS Transportation Network Limited (ITNL), a part of IL&FS Group, confirms that it has been able to secure the safe return of its four employees, working on projects in Ethiopia, to India,” IL&FS said in a statement.
ITNL, through its subsidiary Elsamex SA, has been executing projects across various sites in Ethiopia.
Since mid-2018, under instructions of ITNL, several of the Indian staff employed by its project companies, had returned to India. However, a few Indian employees were not being allowed to leave Ethiopia for past several weeks on account of unpaid dues of locals.
“Of those, three employees returned to India between December 2018 and January 2019; and further four employees have returned to India on 24 February,” IL&FS said.
“The company takes this opportunity to thank all the agencies, including Ministry of External affairs, Indian Embassy in Addis Ababa and other authorities and regulators – in India and Ethiopia –, for their tireless efforts towards facilitating the safe return of its employees from Ethiopia,” it added.