Bad news for creditors as IL&FS, 40 arms move NCLT seeking debt protection

Debt-laden infrastructure financier IL&FS and its 40 subsidiaries have filed a petition with the Mumbai Bench of the National Company Law Tribunal (NCLT) seeking to restructure its debt under Section 230 of the Companies Act 2013.

The company moved the NCLT Mumbai on Monday “seeking certain reliefs” in connection with filing of scheme of arrangement under Section 230 of the Companies Act, said IL&FS in a filing with the exchanges. The scheme will be prepared in compliance with applicable laws and subject to necessary consents of shareholders, creditors and boards of directors of the relevant entities.

IL&FS subsidiaries include IFIN, ITNL, IL&FS Energy Development and IL&FS Engineering & Construction Ltd. The other companies include roads and construction companies.

The Section 230 to 240 of the Companies Act, 2013, contains provisions on ‘Compromises, Arrangements and Amalgamations’, that covers compromise or arrangements, mergers and amalgamations, corporate debt restructuring, demergers, fast track mergers for small companies/holding subsidiary companies, cross border mergers, takeovers, amalgamation of companies in public interest, etc.