NCLAT Advances IL&FS Engineering Resolution Amid ICICI Standoff

NCLAT has approved the insolvency resolution of IL&FS Engineering and Construction Company Limited (IECCL), while delinking it from other loss-making units. Despite ICICI-led consortium objections, the resolution process will continue, with a pending offer of Rs 807 crore from Howen International Fund SPC for a 42.25% stake.

The National Company Law Appellate Tribunal (NCLAT) gave the green light for the insolvency resolution of IL&FS Engineering and Construction Company Limited (IECCL) on Thursday. However, the tribunal clarified that ICICI-led consortium, which opposes the resolution, retains the right to object to the extinguishment of its entire debt.

IL&FS, holding 42.25% of IECCL, has received a binding offer of Rs 807 crore from Howen International Fund SPC under the Swiss Challenge method. The consortium, led by ICICI, argues for selling 100% share capital for better returns. Voting by lenders is expected by September 30, 2024.

The NCLAT ruling allows ICICI Bank to continue its objections regarding debt extinguishment, emphasizing lenders can raise concerns even after the sale of the 42.25% stake is finalized. Discussions on other Category II companies are set for October 14.

(With inputs from agencies.)