IBBI wants CoC to vote on 2 or more resolution plans

Alstom to buy Bombardier’s rail division

French company Alstom said it had agreed to buy the rail division of Bombardier, speeding up the Canadian firm's fire sale. Alstom will pay up to 6.2 billion euros ($6.8 billion) in a mix of cash and shares, according to an MoU between the firms. The Quebec pension firm Caisse de Depot, which owns 32.5% in Bombardier Transportation, will become Alstom's biggest single shareholder on completion with around 18% in the French firm.

New Delhi, Feb. 18: In order to make the insolvency process more smooth, the IBBI has proposed allowing committee of creditors (CoC) to vote simultaneously on two or more resolution plans for a company.

The Insolvency and Bankruptcy Code (IBC) aims at time-bound and market-linked resolution of stressed entities.

The Insolvency and Bankruptcy Board of India (IBBI) implements the code and the CoC of a company has a key role in the resolution process.

Issuing a discussion paper, the IBBI has proposed three changes in regulations—replacement of authorised representative, voting by class of creditors at two stages and voting on two or more compliant resolution plans simultaneously.

In cases where more than one compliant resolution plans are available, both the plans should be put to vote simultaneously by the CoC. "The plan that receives the highest affirmative votes, subject to receiving the requisite 66 per cent, may be regarded as approved by the CoC," the discussion paper noted.

In case, two or more resolution plans receive equal number of votes, the creditors might be asked to vote for one of them,as a tie-breaker measure.

Providing an economic analysis of the proposal, the IBBI said if a resolution plan considered best is not voted in favour by the CoC based on their commercial wisdom, then the CoC would be required to consider the next best plan.

—PTI