IBC Plan Eyes Partial Sale of Assets, Second Shot at Rescue

Lenders can consider sale of individual assets if the whole business finds no buyers

- Gireesh Chandra Prasad

Part from speeding up the disposal of distressed companies as going concerns, the proposed amendments to the Insolvency and Bankruptcy Code (IBC) tabled in Lok Sabha on Tuesday also makes it easier for splitting up such firms so that lenders could consider sale of individual assets when they are unable to find takers for the whole business, two persons informed about the government's deliberations on insolvency reforms said.

The proposed amendments will also prevent orders for liquidation of a distressed company just because the 330-day window available for debt resolution under IBC has expired. This is meant to avoid situations like the Bhushan Power & Steel Ltd., the resolution plan for which was annulled by the Supreme Court in its now-recalled 2 May order.