NCLAT exempts IECCL from debt resolution framework

The National Company Law Appellate Tribunal (NCLAT) on Thursday exempted IL&FS Engineering and Construction Company Ltd (IECCL) from the debt resolution framework of its parent entity Infrastructure Leasing & Financial Services (IL&FS). Howen International Fund SPC, which had made the winning bid of ₹800 crore for a 42.25% stake in IECCL, had sought the exemption.

The debt resolution framework allowed extinguishing 100% of IECCL's debt even though the bid was for only 42.25% of share capital. ICICI Bank, one of the lenders, had opposed the exemption. ICICI bank counsel had argued that IECCL's 100% share capital should be sold since it will fetch a better value than the more than ₹800 crore presently offered for 42.25%.