IL&FS Engineering’s Stake Sale: Lenders Set to Vote on Howen International’s ₹807 Crore Bid

IL&FS Engineering and Construction Company Limited (IECCL) is at the focal point of a high-profile resolution process with lenders set to vote on a new ₹807 crore binding offer from Howen International Fund SPC for a 42.25% stake. These are the top highlights:

Swiss Challenge Method in Play: IL&FS, holding 42.25% in IECCL, received a binding offer of ₹807 crore from Howen International Fund SPC under Swiss Challenge method for maximizing value to its holding and seeking counter-bids from other interested parties.

ICICI-Led Consortium Pushes Back: The ICICI Bank-led lender group has protested, claiming that selling 100% of IECCL's share capital would yield a higher price and provide a cleaner exit. They are also seeking their right to protest the extinguishment of their entire debt, not only the portion related to the 42.25% stake.

NCLAT's Key Order: National Company Law Appellate Tribunal (NCLAT) has okayed delinking resolution of IECCL from other loss-generating IL&FS entities so that the sale process can go ahead. However, it made it clear that lenders would be free to make objections even after the sale of stakes.

Voting Deadline Nears: Lenders are due to vote on the Howen International Fund bid for IECCL by September 30, 2024, with their decision likely to determine IECCL's future and pave the way for other IL&FS asset resolutions.

Wider Implication: The result is closely followed as IL&FS, which was weighed down by ₹94,000 crore debt, continues its asset monetization spree. The resolution will decide the extent of value lenders and stakeholders can recover from one of India's most high-profile insolvency cases.

Sources: Devdiscourse, NDTV Profit, Business Standard