LOW ON spirits, United Spirits Limited ( USL) has sought shareholders' approval to report sick to the Board for Industrial and Financial Reconstruction ( BIFR
The experience is "abysmally discouraging." Debtor's misuse of SICA as reference with BIFR
is deliberately filed to seek an automatic stay on creditor enforcement against the company.
The company had turned sick in 1992 and was then referred to the Board for Industrial and Financial Restructuring (BIFR
), according to reports.
The MCA secretary also declared that over the last two years, IBC has received around 9,000 cases including the cases that were transferred from the Board for Industrial and Financial Reconstruction (BIFR
There are about 700 BIFR
and 15,000 DRT cases (related to corporates only), in addition to 5,200 winding up and amalgamation cases pending before high courts, that are being transferred to NCLT.
In 2001, as an alternative to the BIFR
process, India's central bank allowed companies and their creditors to enter into a debt recast arrangement to help businesses return to financial health.
The company has failed to services its financial obligations on a number of occasions which prompted the rating action, the agency said adding that Pasupati Spinning was declared "a sick company" by BIFR
on 14 July 2005.
The sick public sector company had approached the Board for Industrial and Financial Reconstruction (BIFR
) in February and is looking for an external agency to conduct valuation of its assets.
NJMC was under reference to Board for Industrial and Financial Reconstruction (BIFR
) since 1993.
Many had to take the BIFR
route to delay legal action for debt recovery," he says.