Money & Banking

Insolvency regulator IBBI to empanel Platforms for Distressed Assets

KR Srivats New Delhi | Updated on September 03, 2020

Insolvency regulator IBBI has proposed to empanel Platforms for Distressed Assets (PDA) to enable insolvency professionals (IPs) leverage them to improve their performance and compliance.

With such a move, services offered by empaneled platforms will be published on IBBI website enabling stakeholders to use it.

As per IBBI’s plan, the empaneled PDA can provide platform services for marketplace for interim finance; virtual data room for invitation of resolution plans/liquidation; invitation and evaluation of resolution plans and auction during liquidation.

The IPs may select any of the platform offerings based on the requirements of the particular assignment. There can be more than one successful applicant for any service.

IBBI has invited applications for empanelment and has made it clear that the charges for the service offerings will be determined by the providers of PDAs and will be led by the market.

Requirements

Only companies registered in India, in operation for period of at least five years and consistent profitable operations for last three financial years can apply for empanelment. Net worth of the applicant should be positive over the last three financial years. These are among pre-qualification criterion stipulated by the IBBI.

Expert take

Venkattu Srinivasan, Group President (Asset Reconstruction), Kotak Mahindra Bank, said: “The IBBI’s move to empanel service providers providing platform for distressed assets (PDA) is a progressive step. This will help create a transparent process and achieve price discovery in time bound manner”.

They should do it as fast as possible as it will go a long way in making the entire process robust, he said. This will remove doubts around cartelisation and rigging of prices and improve trust of those transacting through such PDAs, he told BusinessLine.

Published on September 03, 2020

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