The unsecured creditors of debt-ridden IL&FS have a reason to rejoice now as the National Company Law Appellate Tribunal has given its nod to interim distribution of Rs 16,361 crore to creditors at the holding company level.
The interim distribution award of Rs 16,361 crore includes Rs 11,296 crore in cash and Rs 5,065 crore in InvIT units (Infrastructure Investment Trusts). A majority of this is to be distributed to the creditors of three large group firms -- IL&FS, IFIN and ITNL.
NCLAT said that the interim distribution "shall be implemented only after approval by the new board" and "shall take place as pro rata basis". Had this been done according to the normal course, the investors would have received the money only after the liabilities of the group companies were resolved.
The tribunal further instructed IL&FS to complete the resolution process by the end of this month and listed the matter on July 19, 2022 for the next hearing.
"We are of the view that IL&FS and its entities may take all steps to complete the resolution process as per the resolution framework and submit their Application for approval before the NCLT by 30.06.2022," NCLAT said in its order.
This comes after IL&FS had last month made an application to the NCLT for interim distribution, where it said that it will appoint two valuers to arrive at the average liquidation value as of October 2018 and simultaneously complete claim verification.
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