NEW DELHI: In a significant development in the high-profile insolvency case of IL&FS, the National Company Law Appellate Tribunal (NCLAT) has approved the sale of IL&FS Paradip Refinery Water Ltd (IPRWL)to a successful bidder. This move is expected to help the debt-laden group repay around ₹1,000 crore.
IPRWL, established to meet the water requirements of Indian Oil Corporation’s (IOC) 15 million tonnes per annum (MTPA) Paradip Refinery in Odisha, had faced hurdles due to IOC’s lack of consent for the sale.
IL&FS had sought either IOC’s approval to sell the stake under theBOOT (Build, Own, Operate, Transfer)agreement or a commitment from IOC to acquire the entity at a fair valuation.
However, IOC argued that the BOOT agreement, valid until 2039, restricted the sale of IPRWL before its expiration. Dismissing IOC’s objection, the NCLAT ruled that IL&FS can proceed with the sale to a technically qualified bidder in accordance with the BOOT agreement and the terms outlined in the resolution framework.
In its November 22 order, NCLAT emphasised that the successful bidder must possess the requisite technical expertise to continue operating the project effectively.
Most intricate case
IL&FS, which is undergoing one of India’s most intricate debt restructuring processes, has already repaid R38,082 crore to its creditors as of September 30, 2024. At the onset of the crisis in October 2018, the group had a fund-based debt of Rs94,215 crore out of a total external debt of Rs99,355 crore.
The group initially consisted of 302 entities, of which 169 were domestic and 133 offshore. The NCLAT recently directed IL&FS to resolve its remaining 58 entities by March 31, 2025, and extended the moratorium on creditor claims until the same date.
This latest approval marks a key milestone in IL&FS’s ongoing efforts to pare down its massive debt through asset sales and resolution strategies, bringing a step closer to a closure in the widely-discussed insolvency saga.
