IBC Seeks Maximization of Value of Stressed Company
FICCI organized a conference on 'IBC-Effective Resolution of Stressed Assets' on 25 May 2018 in Mumbai. Rashesh Shah, President, FICCI, hailed that the government and Insolvency and Bankruptcy Board of India (IBBI) for showing considerable and positive alacrity in terms of constant interaction with the stakeholders to bring about a strong, comprehensive and robust piece of legislation, which responds to dynamics of the situation.
MS Sahoo, Chairman, IBBI, on the occasion, urged, 'The Committee of Creditors needs to evaluate the options realistically to create sustainable value and not just discover a price.'
While the conference provided a platform for interaction to several stakeholders of IBC (Insolvency and Bankruptcy Code) ecosystem, it focused on the key issues faced by the creditors and resolution applicants and critically examined the robustness of IBC.
One of the significant takeaways from the conference was recognition of IBC as a legislation, which seeks revival of the companies than their liquidation as the companies with right management and entrepreneurship skill would be able to turn them around for the collective benefit of its stakeholders.
It was observed that recent cases under the IBC evidences that the operational creditors have assumed certain rights and their concerns are being resolved on priority by the directors to avoid insolvency proceedings, and such a positive step reflects change in the corporate culture.
The panelists concluded that there was a need for pragmatic decision making to achieve a realistic enterprise value and have transparent processes for discovery of value of the enterprise. Also, it was urged that legislation must provide equitable rights so that interests of the stakeholders are harmonized in letter and spirit. It was heartening to witness the eagerness of the capital providers who were keen to participate in resolution process and sought greater transparency in the information matrix which could sufficiently disclose business and other risks, relevant for decision making.
The key takeaways from the conference have been submitted to IBBI and FICCI is in constant dialogue with the IBC ecosystem participants to ensure that a free, transparent, process-oriented and effective IBC ecosystem is provided such that the industry is able to benefit from the landmark legislation.
MS Sahoo, Chairman, Insolvency and Bankruptcy Board of India.