INSOLVENCY: A new way to acquire an Indian Company – but not everyone is welcome
BY Shardul Amarchand Mangaldas |
India did not have an effective legislation for revival of an insolvent company until the Insolvency and Bankruptcy Code, 2016 (“Code”).
The Code presents an exciting new opportunity for acquisition of stressed companies in India. The acquisition process is similar to a bidding process and the bid (referred in the Code as the ‘resolution plan’) is finally approved by a special tribunal called the National Company Law Tribunal (“NCLT”). A judicial approval (by the NCLT) ensures that the acquirer is able to efficiently clean up past defaults and dues.