NCLAT Approves IL&FS Subsidiary Sale to Bidder

New Delhi, Nov 30 (PTI) Insolvency appellate tribunal NCLAT has given a go-ahead to debt-ridden IL&FS group for the sale of its subsidiary IL&FS Paradip Refinery Water Ltd (IPRWL) to a successful bidder.

According to reports, this may enable IL&FS to repay a debt of around Rs 1,000 crore.

IPRWL was set up to meet water requirement of the 15 MTPA Paradip Refinery Project developed by IOC in Odisha.

IL&FS, which is paring its debt through asset resolution, has not received consent from IOCL for sale of its stake in IPRWL.

It had approached the National Company Law Appellate Tribunal (NCLAT), which is supervising the process, to direct IOCL to either acquire 100 per cent shareholding in IPRWL at a fair valuation or grant its consent as per the terms of the BOOT agreement and the RFP so as to enable IL&FS to sell it.

However, IOCL through its counsel submitted that the BOOT (Build, Own, Operate, and Transfer) agreement with IL&FS was till 2039 and it cannot be disinvested before the said period.

Rejecting this, NCLAT said: "IOCL having not given consent for 100 per cent of the acquisition of the shareholding, we are of the view that ILF&S has to be permitted to proceed to give it to the successful bidder as per the process contemplated under the resolution framework."

However, NCLAT in its order also made it clear that the successful entity should be one who is eligible as per the terms of the BOOT agreement and has relevant technical know-how to carry on the project.

"We thus accept the prayer of the appellant to proceed for giving it to the successful bidder as per the terms of the BOOT agreement and the RFP as per the process contemplated under the resolution framework to its eligible entity," said NCLAT in its order dated November 22.

IL&FS group has paid Rs 38,082 crore to its creditors as of September 30, 2024, according to the latest status report affidavit filed by the debt-ridden firm before NCLAT.

IL&FS Group, as of October 2018, had availed fund-based debt of Rs 94,215 crore out of the total external debt outstanding of Rs 99,355 crore.

Earlier this month, NCLAT has directed the IL&FS group to complete the resolution of the remaining 58 firms by March 31, 2025, and extended the moratorium by then.

At that time of crisis, IL&FS had a total of 302 entities, of which 169 were domestic and the rest 133 were offshore.