As they explore ways to recover debt, lenders of Jet Airways are in favour of a resolution outside the insolvency law framework in case the ongoing bidding process fails to take off, sources said.

Running into debt of more than Rs 8,500 crore, Jet Airways has shut down operations temporarily after lenders decided against extending emergency funds for its survival.

SBI, the lead lender of the seven-member consortium of domestic banks that have extended loans to the airline, has started the bidding process for stake sale in the carrier and clarity about potential bidders would emerge next month.

While lenders are “reasonably hopeful” of a successful bidding process, sources said banks are working on a plan B in case things don’t progress as expected. If the bidding process fails, lenders would favour a resolution for the debt-ridden Jet Airways outside the Insolvency and Bankruptcy Code (IBC) framework, sources said.

Recovery on the basis of existing security and tangible assets would be a preferred option, they added. Under the Code, the National Company Law Tribunal’s (NCLT) approval is required for initiating the process, wherein the resolution would be market-linked and time-bound.

Outside the NCLT would be a better option as far as plan B is concerned, sources said, adding that then banks would realise better value from the aircraft and other tangible assets owned by Jet Airways. Four entities — Etihad Airways, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF) — are learnt to have shown interest in picking up stake in Jet Airways.

The details of initial bidders are expected to be known on May 10. As they wait for the completion of the bidding process, the lenders are also looking at options to raise funds from the carrier’s available assets, including utilising Jet Airways’ 16 own planes.

On Friday, sources said that lenders have been proactive and cannot be blamed for the current situation at the airline. “They (lenders) have been actively engaging with the company for almost nine months ever since the airline started incurring cash losses and have been urging the management to come forward with a definite plan for resolution.”

“Unfortunately, the management and the promoter delayed in taking a decision leading to the present situation. The lenders continued to support the airline during this period,” one of the sources had said

As they explore ways to recover debt, lenders of Jet Airways are in favour of a resolution outside the insolvency law framework in case the ongoing bidding process fails to take off, sources said.

As they explore ways to recover debt, lenders of Jet Airways are in favour of a resolution outside the insolvency law framework in case the ongoing bidding process fails to take off, sources said. Running into debt of more than Rs 8,500 crore, Jet Airways has shut down operations temporarily after lenders decided against extending emergency funds for its survival. SBI, the lead lender of the seven-member consortium of domestic banks that have extended loans to the airline, has started the bidding process for stake sale in the carrier and clarity about potential bidders would emerge next month. While lenders are “reasonably hopeful” of a successful bidding process, sources said banks are working on a plan B in case things don’t progress as expected. If the bidding process fails, lenders would favour a resolution for the debt-ridden Jet Airways outside the Insolvency and Bankruptcy Code (IBC) framework, sources said. Recovery on the basis of existing security and tangible assets would be a preferred option, they added. Under the Code, the National Company Law Tribunal’s (NCLT) approval is required for initiating the process, wherein the resolution would be market-linked and time-bound. Outside the NCLT would be a better option as far as plan B is concerned, sources said, adding that then banks would realise better value from the aircraft and other tangible assets owned by Jet Airways. Four entities — Etihad Airways, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF) — are learnt to have shown interest in picking up stake in Jet Airways. The details of initial bidders are expected to be known on May 10. As they wait for the completion of the bidding process, the lenders are also looking at options to raise funds from the carrier’s available assets, including utilising Jet Airways’ 16 own planes. On Friday, sources said that lenders have been proactive and cannot be blamed for the current situation at the airline. “They (lenders) have been actively engaging with the company for almost nine months ever since the airline started incurring cash losses and have been urging the management to come forward with a definite plan for resolution.” “Unfortunately, the management and the promoter delayed in taking a decision leading to the present situation. The lenders continued to support the airline during this period,” one of the sources had said

Jet Airways crisis: Lenders in favour of non-IBC resolution if bidding process fails

Telecom operator Aircel on Wednesday said it has filed for bankruptcy as the company has been facing &quot;troubled times&quot; in &quot;highly financially stressed&quot; industry.

In a statement, Aircel said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant &quot;negative business and reputational impact&quot; on the company.

&quot;The Board of Directors of the Corporate Debtor today announced that they have filed an application under Section 10 of the Insolvency and Bankruptcy Code 2016 for undertaking Corporate Insolvency Resolution Process for the respective companies: Aircel Cellular, Dishnet Wireless, Aircel Ltd,&quot; the the statement said.

Sources said that the filing was made in National Company Law Tribunal (NCLT) Mumbai.

The company statement also noted that efforts to merge wireless business with another operator did not yield any results and had ultimately lapsed in September 2017.

&quot;Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018...No agreement could be reached,&quot; Aircel said.

The company also said it believes that in the current circumstances, resolution process under the Insolvency and Bankruptcy Code is an &quot;appropriate recourse&quot;.

&quot;The Company would like to emphasise that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc) to protect and preserve the value of the company and manage the operations,&quot; it added.

Aircel said it will strive to provide uninterrupted service connectivity to its customers and sought their support in the &quot;current difficult period&quot;.

Sources said that the filing was made in National Company Law Tribunal (NCLT) Mumbai.

Telecom operator Aircel on Wednesday said it has filed for bankruptcy as the company has been facing "troubled times" in "highly financially stressed" industry. In a statement, Aircel said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant "negative business and reputational impact" on the company. "The Board of Directors of the Corporate Debtor today announced that they have filed an application under Section 10 of the Insolvency and Bankruptcy Code 2016 for undertaking Corporate Insolvency Resolution Process for the respective companies: Aircel Cellular, Dishnet Wireless, Aircel Ltd," the the statement said. Sources said that the filing was made in National Company Law Tribunal (NCLT) Mumbai. The company statement also noted that efforts to merge wireless business with another operator did not yield any results and had ultimately lapsed in September 2017. "Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018...No agreement could be reached," Aircel said. The company also said it believes that in the current circumstances, resolution process under the Insolvency and Bankruptcy Code is an "appropriate recourse". "The Company would like to emphasise that CIRP is not a proceeding for liquidation, rather is a process to find best possible resolution for the current situation and that would be in the best interest of everyone (vendors, distributors, employees, etc) to protect and preserve the value of the company and manage the operations," it added. Aircel said it will strive to provide uninterrupted service connectivity to its customers and sought their support in the "current difficult period".

Aircel files for bankruptcy; cites intense competition, unsustainable debt

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC).

The new guidelines have specified framework for early identification and reporting of stressed assets.

&quot;In view of the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, it has been decided to substitute the existing guidelines with a harmonised and simplified generic framework for resolution of stressed assets,&quot; the RBI said in a notification issued late in the evening.

Among other things, the RBI has decided to do away with the Joint Lenders&#39; Forum (JLF) as an institutional mechanism for resolution of stressed accounts also stands discontinued.

The notification further said all accounts, including those where any of the schemes have been invoked but not yet implemented, will be governed by the revised framework.

As per the revised guidelines, the banks will be required to identify incipient stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) depending upon the period of default.

All lenders will be required to put in place Board- approved policies for resolution of stressed assets under this framework, including the timelines for resolution, it said, adding, &quot;As soon as there is a default in the borrower entity&#39;s account with any lender, all lenders - singly or jointly - shall initiate steps to cure the default.&quot;

The resolution plan (RP) may involve any actions/plans/ reorganisation including, but not limited to, regularisation of the account by payment of all over dues by the borrower entity, sale of the exposures to other entities / investors, change in ownership, or restructuring.

The revised framework has also laid down the timelines for resolution of stressed assets.

If a resolution plan in respect of large accounts is not implemented as per the timelines specified, lenders will be required to file insolvency application, singly or jointly, under the IBC, 2016, within 15 days from the expiry of the specified timeline.

It further said all lenders will be required to submit Central Repository of Information on Large Credits (CRILC)- Main Report to the Reserve Bank on a monthly basis effective April 1, 2018.

In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs 5 crore and above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a holiday.

The first such weekly report shall be submitted for the week ending February 23, 2018, with a view to harmonise the guidelines with the norms specified in the IBC, said the notification while withdrawing existing mechanism for dealing with the bad debt in the banking system.

The new guidelines have specified framework for early identification and reporting of stressed assets.

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC)

The Reserve Bank of India on Tuesday came out with a revised framework for expeditious resolution of bad loans, harmonising the existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC). The new guidelines have specified framework for early identification and reporting of stressed assets. "In view of the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, it has been decided to substitute the existing guidelines with a harmonised and simplified generic framework for resolution of stressed assets," the RBI said in a notification issued late in the evening. Among other things, the RBI has decided to do away with the Joint Lenders' Forum (JLF) as an institutional mechanism for resolution of stressed accounts also stands discontinued. The notification further said all accounts, including those where any of the schemes have been invoked but not yet implemented, will be governed by the revised framework. As per the revised guidelines, the banks will be required to identify incipient stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) depending upon the period of default. All lenders will be required to put in place Board- approved policies for resolution of stressed assets under this framework, including the timelines for resolution, it said, adding, "As soon as there is a default in the borrower entity's account with any lender, all lenders - singly or jointly - shall initiate steps to cure the default." The resolution plan (RP) may involve any actions/plans/ reorganisation including, but not limited to, regularisation of the account by payment of all over dues by the borrower entity, sale of the exposures to other entities / investors, change in ownership, or restructuring. The revised framework has also laid down the timelines for resolution of stressed assets. If a resolution plan in respect of large accounts is not implemented as per the timelines specified, lenders will be required to file insolvency application, singly or jointly, under the IBC, 2016, within 15 days from the expiry of the specified timeline. It further said all lenders will be required to submit Central Repository of Information on Large Credits (CRILC)- Main Report to the Reserve Bank on a monthly basis effective April 1, 2018. In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs 5 crore and above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a holiday. The first such weekly report shall be submitted for the week ending February 23, 2018, with a view to harmonise the guidelines with the norms specified in the IBC, said the notification while withdrawing existing mechanism for dealing with the bad debt in the banking system. The new guidelines have specified framework for early identification and reporting of stressed assets.

RBI notifies revised framework to deal with bad loans

Private investment seems poised to rebound with efforts being made for expeditious resolution of bad loans and adequate recapitalisation of public sector banks (PSBs), the Economic Survey said.

The government announced a large recapitalisation package of about 1.2 per cent of GDP to strengthen the balance sheets of the PSBs, the Economic Survey 2017-18 tabled in Parliament said today.

Last week, the government announced a slew of reforms for the banking sector and said it will infuse an unprecedented Rs 88,139 crore capital in 20 PSBs before March 31 to boost lending and revive growth.

&quot;As these twin reforms take hold, firms should finally be able to resume spending and banks to lend especially to the critical, but currently-stressed sectors of infrastructure and manufacturing,&quot; the pre-Budget survey said.

It noted that the private investment seems poised to rebound, as many of the factors exerting a drag on growth over the past year finally ease off.

&quot;Translating this potential into an actual investment rebound will depend on the resolution and recapitalisation process. If this process moves ahead expeditiously, stressed firms will be put in the hands of stronger ownership, allowing them to resume spending.

&quot;But if resolution is delayed, so too will the return of the private capex cycle. And if this occurs, public investment will not be able to step into the breach, since it will be constrained by the need to maintain a modicum of fiscal consolidation to head off market anxieties,&quot; it said.

Observing that another key determinant of growth will be the implementation of the Insolvency and Bankruptcy Code (IBC) process, it said timeliness in resolution and acceptance of the IBC solutions must be a priority to kick-start private investment.

The greater the delays in the early cases, the greater the risk that uncertainty will soon shroud the entire IBC process, it said.

&quot;It is also possible that expeditious resolution may require the government to provide more resources to PSBs, especially if the haircuts required are greater than previously expected, the ongoing process of asset quality recognition uncovers more stressed assets, and if new accounting standards are implemented,&quot; it said.

The government announced a large recapitalisation package of about 1.2 per cent of GDP to strengthen the balance sheets of the PSBs, the Economic Survey 2017-18 tabled in Parliament said today

Private investment seems poised to rebound with efforts being made for expeditious resolution of bad loans and adequate recapitalisation of public sector banks (PSBs), the Economic Survey said. The government announced a large recapitalisation package of about 1.2 per cent of GDP to strengthen the balance sheets of the PSBs, the Economic Survey 2017-18 tabled in Parliament said today. Last week, the government announced a slew of reforms for the banking sector and said it will infuse an unprecedented Rs 88,139 crore capital in 20 PSBs before March 31 to boost lending and revive growth. "As these twin reforms take hold, firms should finally be able to resume spending and banks to lend especially to the critical, but currently-stressed sectors of infrastructure and manufacturing," the pre-Budget survey said. It noted that the private investment seems poised to rebound, as many of the factors exerting a drag on growth over the past year finally ease off. "Translating this potential into an actual investment rebound will depend on the resolution and recapitalisation process. If this process moves ahead expeditiously, stressed firms will be put in the hands of stronger ownership, allowing them to resume spending. "But if resolution is delayed, so too will the return of the private capex cycle. And if this occurs, public investment will not be able to step into the breach, since it will be constrained by the need to maintain a modicum of fiscal consolidation to head off market anxieties," it said. Observing that another key determinant of growth will be the implementation of the Insolvency and Bankruptcy Code (IBC) process, it said timeliness in resolution and acceptance of the IBC solutions must be a priority to kick-start private investment. The greater the delays in the early cases, the greater the risk that uncertainty will soon shroud the entire IBC process, it said. "It is also possible that expeditious resolution may require the government to provide more resources to PSBs, especially if the haircuts required are greater than previously expected, the ongoing process of asset quality recognition uncovers more stressed assets, and if new accounting standards are implemented," it said.

Private investment to rise with NPA resolution, PSBs recap

The Supreme Court has extended the deadline for realty major Jaypee Group till January 25 to deposit Rs 125 crore in pursuance of a direction aimed at protecting the interests of hassled home buyers.

The court also warned Jaiprakash Associates Limited (JAL), the holding company, that non-compliance of its order would make it liable for contempt of court.

Jaiprakash Associate Limited had on Thursday deposited Rs 150 crore in the Supreme Court registry and sought extension of time to deposit remaining Rs 125 crore.

The court hd on November 22 accepted a demand draft of Rs 275 crore submitted by the real estate firm and directed it to pay another two tranches of Rs 150 crore and Rs 125 crore respectively by December 14 and 31.

Earlier, the court had directed 13 directors of JAL not to alienate their personal properties.

The top court had also made it clear that it was granting &quot;indulgence&quot; to allow the firm to deposit Rs 2,000 crore in instalments as the interest of homebuyers was &quot;paramount&quot;.

The JAL directors had filed affidavits giving details of their personal assets and they are now required to appear again on January 10.

The apex court, on November 13, had also restrained the managing director and the directors of Jaypee Infratech Ltd from travelling abroad without prior permission.

The court had asked Jaypee Infratech to hand over the records to the interim resolution professional (IRP) to draft a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors.

It had also stayed any proceedings instituted against Jaypee Infratech for any purpose in any forum like the consumer commission, as the IRP has been given control of the company&#39;s management.

Homebuyers including one Chitra Sharma, through lawyer Ashwarya Sinha, had moved the apex court saying around 32,000 people had booked their flats and are now paying installments.

The top court had on September 4 stayed insolvency proceedings against the real estate firm at National Company Law Tribunal (NCLT).

Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence they can get back their money only if something is left after repaying the secured and operational creditors, Sharma, in her plea, said.

Hundreds of home buyers have been left in the lurch after the NCLT, on August 10, admitted the IDBI Bank&#39;s plea to initiate insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526 crore loan, the plea said.

Jaiprakash Associate Limited had on Thursday deposited Rs 150 crore in the Supreme Court registry and sought extension of time to deposit remaining Rs 125 crore.

The Supreme Court has extended the deadline for realty major Jaypee Group till January 25 to deposit Rs 125 crore in pursuance of a direction aimed at protecting the interests of hassled home buyers. The court also warned Jaiprakash Associates Limited (JAL), the holding company, that non-compliance of its order would make it liable for contempt of court. Jaiprakash Associate Limited had on Thursday deposited Rs 150 crore in the Supreme Court registry and sought extension of time to deposit remaining Rs 125 crore. The court hd on November 22 accepted a demand draft of Rs 275 crore submitted by the real estate firm and directed it to pay another two tranches of Rs 150 crore and Rs 125 crore respectively by December 14 and 31. Earlier, the court had directed 13 directors of JAL not to alienate their personal properties. The top court had also made it clear that it was granting "indulgence" to allow the firm to deposit Rs 2,000 crore in instalments as the interest of homebuyers was "paramount". The JAL directors had filed affidavits giving details of their personal assets and they are now required to appear again on January 10. The apex court, on November 13, had also restrained the managing director and the directors of Jaypee Infratech Ltd from travelling abroad without prior permission. The court had asked Jaypee Infratech to hand over the records to the interim resolution professional (IRP) to draft a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors. It had also stayed any proceedings instituted against Jaypee Infratech for any purpose in any forum like the consumer commission, as the IRP has been given control of the company's management. Homebuyers including one Chitra Sharma, through lawyer Ashwarya Sinha, had moved the apex court saying around 32,000 people had booked their flats and are now paying installments. The top court had on September 4 stayed insolvency proceedings against the real estate firm at National Company Law Tribunal (NCLT). Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence they can get back their money only if something is left after repaying the secured and operational creditors, Sharma, in her plea, said. Hundreds of home buyers have been left in the lurch after the NCLT, on August 10, admitted the IDBI Bank's plea to initiate insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526 crore loan, the plea said.

Deposit Rs 125 crore by Jan 25 or face contempt: Supreme Court to Jaypee Group

Insolvency and Bankruptcy Board of India has amended its corporate insolvency resolution process regulations to ensure that as part of due diligence prior to approval of a resolution plan, the antecedents, credit worthiness and credibility of a resolution applicant, including promoters, are taken into account by the &nbsp;Committee of Creditors.

With a view to ensure that the corporate insolvency resolution process results in a credible and viable resolution plan, the Insolvency and Bankruptcy Board of India (IBBI) has carried out amendments to the IBBI (Insolvency Resolution Process for Corporate Persons) resolution process, 2016 (CIRP Regulations).

The revised regulations make it incumbent upon the resolution professional to ensure that the resolution plan presented to the Committee of Creditors contains relevant details to assess the credibility of the resolution applicants. &nbsp;The details to be provided would include details with respect to the resolution applicant in terms of convictions, disqualifications, criminal proceedings, categorization as willful defaulter as per RBI guidelines, debarment imposed by SEBI, if any, and transaction, if any, with the corporate debtor in the last two years.

Apart from the above, the resolution professional has to also submit details in respect of transactions observed or determined, if any, covered under Section 43 (Preferential Transactions); Section 45 (Undervalued Transactions); Section 50 (Extortionate Credit Transactions); Section 66 (Fraudulent Transactions) under Insolvency and Bankruptcy Code, 2016. &nbsp;

By virtue of the above-mentioned changes in the regulations the resolution applicants, including promoters, are put to a stringent test with respect to their creditworthiness and credibility. &nbsp;Further, it also imposes greater responsibility on the resolution professional and Committee of Creditors in discharging their duties.

The revised regulations make it incumbent upon the resolution professional to ensure that the resolution plan presented to the Committee of Creditors contains relevant details to assess the credibility of the resolution applicants.

Insolvency and Bankruptcy Board of India has amended its corporate insolvency resolution process regulations to ensure that as part of due diligence prior to approval of a resolution plan, the antecedents, credit worthiness and credibility of a resolution applicant, including promoters, are taken into account by the Committee of Creditors. With a view to ensure that the corporate insolvency resolution process results in a credible and viable resolution plan, the Insolvency and Bankruptcy Board of India (IBBI) has carried out amendments to the IBBI (Insolvency Resolution Process for Corporate Persons) resolution process, 2016 (CIRP Regulations). The revised regulations make it incumbent upon the resolution professional to ensure that the resolution plan presented to the Committee of Creditors contains relevant details to assess the credibility of the resolution applicants. The details to be provided would include details with respect to the resolution applicant in terms of convictions, disqualifications, criminal proceedings, categorization as willful defaulter as per RBI guidelines, debarment imposed by SEBI, if any, and transaction, if any, with the corporate debtor in the last two years. Apart from the above, the resolution professional has to also submit details in respect of transactions observed or determined, if any, covered under Section 43 (Preferential Transactions); Section 45 (Undervalued Transactions); Section 50 (Extortionate Credit Transactions); Section 66 (Fraudulent Transactions) under Insolvency and Bankruptcy Code, 2016. By virtue of the above-mentioned changes in the regulations the resolution applicants, including promoters, are put to a stringent test with respect to their creditworthiness and credibility. Further, it also imposes greater responsibility on the resolution professional and Committee of Creditors in discharging their duties.

IBBI strengthens Due Diligence framework under the Insolvency and Bankruptcy Code, 2016