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Creating Value through Acquisition of Stressed Assets in India under Insolvency Law

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Presented by Mr. K.K. Balu Former Vice-Chairman, Company Law Board, Corporate Attorney and Senior Advisor, A.K. Mylsamy and Associates LLP, Attorneys-At-law, India.

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Creating Value through Acquisition of Stressed Assets in India under Insolvency Law

  1. 1. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Creating value by Acquiring Stressed Assets in India through Insolvency Law K.K. Balu Attorney, Former Vice-Chairman Company Law Board 5th June 2020 © 2020: A.K. Mylsamy & Associates LLP
  2. 2. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Stressed Co. can be acquired by you on a ‘Going Concern’ basis after a complete clean up Full Change of Ownership of Target Co. to you Full Change of Management of Target Co. to you You can start your manufacturing operations immediately Acquiring Stressed Companies in Resolution Stage 2
  3. 3. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore 1 Resolution Stage: Acquiring stressed companies ST AGE ONE 2 ST AGE T WO Liquidation Stage: Acquiring stressed Companies or their Assets Acquisition through merger, Amalgamation or de-merger of Target Company If Companies in Resolution Stage are not acquired, NCLT Orders Liquidation
  4. 4. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Start of Acquisition Process Submit Expression Of InterestInvitation of EOI CoC’s Approval of Resolution Plan RP Submits Plan to NCLT for approval RP issues RFRP & IM Submit Resolution plan NCLT Approves Resolution Plan Acquisition is completed T*-0 75 23 90 105 150 135 165 Max. 330 Commencement** CoC Constitution Acquisition in Resolution Stage: Process and Timeline *T = Timeline: No. of Days **Commencement: Case is Admitted & IRP Appointed, Moratorium 4
  5. 5. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Stage No. Of Companies In Resolution 2170* In Liquidation 914 *Available as on March 31, 2020 Total No. of Companies Available for Takeover 5
  6. 6. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Resolution Plan-Takeover document are approved by NCLT-Court and is legally Binding on all. You will be protected. 01. Licenses, permits, concessions etc., of Target Co. remains Intact. 02. You can choose a merger, amalgamation or demerger by restructuring the Target. 03. Takeover through IBC shields and provides immunity to you & Target Co. 04. Takeover is time-bound: Max. 255 Days from your entry. 05. Major Advantages to an Acquirer: Takeover under Resolution Stage 6
  7. 7. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Full flexibility to you in structuring Takeover-Subject to IBC requirements. 06. Very Large number of Target Companies in all Industries/Sectors across India are available for Takeover. 07. Intellectual Property Rights of Target Co. is preserved. 08. IBC prevails over all other laws in India if there is inconsistency with other Laws. Investors will stand to gain. 09. You can reap benefits of bilateral agreements with India and Japan. 10. 11. Disputes in Resolution are speedily resolved by NCLT, NCLAT and Supreme Court unlike general civil litigations. 7
  8. 8. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Industry-wise availability of Target Companies Industry In Resolution In Liquidation Manufacturing 851 396 Food & Beverage 120 49 Chemicals & chemical products 85 34 Electrical machinery & apparatus 51 45 Fabricated metal products 46 24 Machinery & Equipment 94 36 8
  9. 9. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Industry In Resolution In Liquidation Textiles, Leather & Apparel Products 136 88 Wood, Rubber, Plastic & Paper Products 114 34 Basic Metals 147 64 Others 58 22 Real Estate, Renting & Business Activities - 450 148 Industry-wise availability of Target Companies 9
  10. 10. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Industry In Resolution In Liquidation Real Estate Activities 127 17 Computer & related activities 66 23 Research and Development 2 0 Other Business Activities 255 108 Construction 261 66 Wholesale & Retail Trade 210 117 Industry-wise availability of Target Companies 10
  11. 11. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Industry In Resolution In Liquidation Hotels & Restaurants 46 18 Electricity & Others 87 18 Transport, Storage & Communications 55 37 Others 210 114 Total 2170 914 Industry-wise availability of Target Companies 11
  12. 12. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore Thank you K.K. Balu balu.kk@akmLLP.com
  13. 13. A K MYLSAMY & ASSOCIATES LLP Chennai • New Delhi • Coimbatore • Bangalore This file is sent by A.K. Mylsamy & Associates LLP [‘AKM’] on a strictly private, confidential and a need to know basis exclusively to the intended recipient. The information contained herein is of a general nature and is purely for informational purposes only. The receipt of this file shall not be construed under any circumstances directly or indirectly as solicitation or advertisement, circular, invitation, etc.,. The recipient of this file shall not disclose, reproduce or use the whole of this file or in part for any purpose or furnish to any other person. Contact Details Chennai Mowbrays Towers, 61, TTK Road, Chennai 600 018 India +91 99629 11111 Bengaluru 2283, 14th A Main Road, HAL 2nd Stage, Indiranagar Bengaluru 560008 India +91 99161 54232 Coimbatore 965, Harita Centre, Avinashi Road, Coimbatore 641 037 India +91-94440 55994 Suman@akmLLP.com

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