Asia Press Agency

Tag: IDBI Bank

  • Government: Asset Valuer for IDBI Bank’s Strategic Disinvestment

    Government: Asset Valuer for IDBI Bank’s Strategic Disinvestment

    The Indian government has initiated the process of strategic disinvestment in IDBI Bank by inviting bids to engage an asset valuer for the transaction. The government and the Life Insurance Corporation of India (LIC) are collectively selling approximately 61% of their stake in IDBI Bank, and multiple expressions of interest (EoI) have been received for the disinvestment.

     

    The Department of Investment & Public Asset Management (DIPAM), on behalf of the government and LIC, recently released a request for proposal (RFP) to engage a reputable asset valuer entity registered with the Insolvency & Bankruptcy Board of India (IBBI). The selected entity will be responsible for valuing various aspects of IDBI Bank’s assets and providing necessary assistance throughout the strategic disinvestment process.

     

    The RFP outlines that the contract with the asset valuer will be initially valid for three years from the date of the appointment letter, with the possibility of extending it for an additional year on existing terms and conditions. Interested parties have until October 9 to submit their bids for consideration.

     

    In May 2021, the Cabinet Committee on Economic Affairs (CCEA) approved the strategic disinvestment of the government and LIC’s equity stakes in IDBI Bank, along with the transfer of management control.

     

    The asset valuer will be tasked with valuing several aspects of IDBI Bank, including:

     

    • Investments (including investments in subsidiaries, associates, joint ventures, and affiliates, as applicable).
    • Loans and advances.
    • Fixed assets.
    • Other assets.

     

    Additionally, the asset valuer will work closely with the transaction advisor and legal advisor appointed by DIPAM to ensure a smooth disinvestment process. IDBI Bank’s liabilities, which include deposits, borrowings, and other liabilities and provisions, will also be considered in the valuation.

     

    As of March 2023, LIC holds a 49.24% stake in IDBI Bank, while the government holds 45.48%. Post the strategic disinvestment, the government and LIC will own 15% and 19%, respectively, in the bank, resulting in a combined holding of 34%.

     

    The strategic disinvestment of IDBI Bank represents a significant step in the government’s ongoing efforts to divest its interests in various state-owned enterprises and promote privatization in key sectors of the economy.

  • NCLAT Agrees to Hear IDBI Bank’s Plea for Zee

    NCLAT Agrees to Hear IDBI Bank’s Plea for Zee

    The National Company Law Appellate Tribunal (NCLAT) has set a date of 31 August to hear IDBI Bank’s plea seeking insolvency proceedings against Zee Entertainment Enterprises. The move comes after IDBI Bank filed a challenge with the NCLAT on 20 July, contesting the National Company Law Tribunal’s (NCLT) rejection of its plea to initiate insolvency proceedings against Zee Entertainment.

     

    The dispute between IDBI Bank and Zee Entertainment revolves around dues amounting to ₹149.6 crore. The bank is seeking to recover these outstanding amounts through the insolvency process. Zee Entertainment, on the other hand, has opposed the initiation of insolvency proceedings and has been contesting the matter in court.

     

    Notably, the NCLT had recently given its approval for the merger of Zee Entertainment with Sony Pictures (Culver Max Entertainment), marking a significant development in the Indian media and entertainment industry. This merger, which is considered one of the largest in the sector, had faced opposition from various financial and operational creditors, including IndusInd Bank, IDBI Bank, and JC Flower ARC.

     

    However, Justice H. V. Subba Rao dismissed all objections raised by the creditors and approved the merger between Zee Entertainment and Sony India. The NCLT’s decision to greenlight the merger was a significant step towards consolidating the media and entertainment landscape in the country.

     

    The upcoming hearing at the NCLAT regarding IDBI Bank’s plea for insolvency proceedings against Zee Entertainment adds another layer of complexity to the situation. The outcome of this hearing will likely have implications for both the creditors seeking recovery and for the ongoing merger process.

     

    The case highlights the intricacies and legal challenges that often arise in complex business mergers and financial disputes. As various stakeholders seek to protect their interests, the judicial process plays a crucial role in determining the path forward. The media and entertainment sector in India is closely watching these developments, as they could shape the future landscape of the industry and impact the operations of major players involved.

     

    As the legal proceedings continue, industry experts and stakeholders will be keenly observing the NCLAT’s decision and its potential impact on the larger business and regulatory environment.

  • IDBI Bank Challenges NCLT Decision on Zee Insolvency

    IDBI Bank Challenges NCLT Decision on Zee Insolvency

    IDBI Bank has taken the matter to the National Company Law Appellate Tribunal (NCLAT) on Thursday, challenging the rejection of its plea by the National Company Law Tribunal (NCLT) on May 19. The NCLT had turned down IDBI Bank’s request to initiate insolvency proceedings against Zee Entertainment Enterprises (ZEE), and now IDBI Bank is seeking a review of that decision.

     

    The insolvency application was filed with the dedicated bankruptcy tribunal to recover dues of ₹149.60 crore from Zee Entertainment. Although the case has been filed with the court registrar, it is yet to be listed for a hearing.

     

    IDBI Bank filed the petition under section 7 of the Insolvency and Bankruptcy Code (IBC), which allows financial creditors to apply for initiating Corporate Insolvency Resolution Process (CIRP) against a corporate debtor before the adjudicating authority.

     

    IDBI Bank’s claim against ZEE arises from a debt service reserve account (DSRA) guarantee, which the bank alleges was provided by ZEE to secure loans extended by IDBI Bank to Siti Networks Ltd, both of which were part of the Essel Group. IDBI Bank argued before the NCLT that its claim was similar to that of IndusInd Bank, and on that basis, the application should be accepted.

     

    Similarly, IndusInd Bank had also filed an application against ZEE, which was accepted by the NCLT on February 22. However, the NCLAT later provided relief to the media company, led by managing director and chief executive Puneet Goenka, against the NCLT’s order. ZEE subsequently reached a settlement agreement with IndusInd Bank in March, inching closer to its planned merger with Sony Pictures (Culver Max Entertainment).

     

    Both IndusInd Bank’s and IDBI Bank’s claims were opposed by ZEE, mainly on the grounds that the guarantee was invoked during the pandemic. According to Section 10A of the IBC, insolvency proceedings cannot be initiated for defaults that occurred during the covid period from March 25, 2020, to March 25, 2021. ZEE also asserted that the guarantee was limited and did not extend to the entire debt.

     

    Notably, ZEE’s proposed merger with Sony Pictures (Culver Max Entertainment) has faced legal obstacles due to opposition from various parties, including IndusInd Bank, Axis Finance, and JC Flower ARC. The Mumbai bench of NCLT has heard all parties and is yet to give its final verdict on the matter.

     

    ZEE has contended that the merger has been approved by the majority of shareholders and claimed that those opposing it are non-creditor objectors with no locus in the matter.