The government may remove the blanket ban on corporate guarantors of failed businesses bidding for stressed assets during the resolution process as it seeks to soften some of the rigidities in a recent ordinance amending the Insolvency and Bankruptcy Code (IBC). It may also create a carveout for smaller insolvent firms to allow their promoters to bid during the resolution process.
These changes are likely to be made when the ordinance is introduced in Parliament in the upcoming winter session. Issued last month, the ordinance barred guarantors of insolvent companies from bidding for the assets for which they had provided a guarantee, irrespective of whether this had been invoked and respected or not. “Changes are being examined…
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