Resolution Plans Help Creditors Realize $35 Bln As Of March 2023, IBBI Says

The creditors realized a total of 2.86 lakh crore rupees ($35 billion) under the resolution plans of corporate debtors as of 31 March 2023 since the inception of India’s Insolvency & Bankruptcy Code (IBC) in December 2016.

The fair value of the assets available with these corporate debtors, when they entered corporate insolvency resolution process (CIRP), was estimated at 2.65 lakh crore rupees and liquidation value of 1.70 lakh crore rupees against the creditors total claim of around 8.99 lakh crore rupees, the Insolvency & Bankruptcy Board of India (IBBI) said in its latest quarterly report.

The creditors have realized 168.5% of the liquidation value and more than 83% of the fair value (based on 586 cases where fair value have been estimated), it added.

The IBBI sad the haircut for creditors relative to the fair value of assets was less than 17%, and at around 68% relative to their admitted claims. The realizable value does not include the CIRP cost, and several probable future realizations, it noted.

The insolvency regulator said the provisions related to the CIRP came into force on 1 December 2016 and a total of 6,571 CIRPs commenced by the end of March 2023. Of these, 4,515 cases have been closed, it added.

Of the CIRPs closed, the corporate debtor was rescued in 2,485 cases, of which 959 cases were closed on appeal or review or settled, while 848 cases were withdrawn and 678 cases ended in approval of resolution plans, the IBBI said.

Liquidation & Withdrawals

The regulator said during the January-March 2023 quarter, 120 CIRPs ended in orders for liquidation, taking the total CIRPs ending in liquidation to 2,030. It noted that there are 1,510 ongoing liquidation processes.

The IBBI said that a total of 848 CIRPs were withdrawn under section 12A of the IBC until March 2023. The reasons for withdrawal included full settlement with the applicant, full settlement with other creditors, agreement to settle in future and other settlement with creditors, it noted.

Individual Insolvency Resolution

The IBBI said the provisions regarding the insolvency resolution and bankruptcy related to personal guarantors (PGs) to corporate debtors came into force on 1 December 2019.

A total of 1,839 applications have been filed until 31 March 2023 for initiation of personal insolvency resolution process of PGs. Out of these, 170 applications have been filed by the debtors and 1,669 applications by the creditors under sections 94 and 95 of the IBC, respectively.

The regulator noted that of the 1,839 applications, 63 applications were withdrawn/rejected/dismissed before the appointment of resolution professional (RPs), while RPs were appointed in 760 cases.

Following the appointment of RP, 36 cases were withdrawn/rejected/dismissed and 208 cases were admitted, it said.

(Note: $1 = 82.2659 Indian rupees)

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