INTERIM FINANCE - A NEED OF CORPORATE DEBTOR! A REVOLUTIONARY INVESTMENT OPPURTUNITY!
The objective of enacting Insolvency and Bankruptcy Code, 2016 is eminent to all. However, the undefining haircut offered to the creditors in Jet Airways and Videocon has opened a pandora’s box of criticism which has eventually questioned the foundation of the code. Distressed companies undergoing CIRP have become an easy bait for the financially viable companies by which they get the assets of stressed companies at a price way below the market price. A year ago, Union Minister of State for Corporate Affairs Shri Rao Inderjit Singh in a written reply to a question in Rajya Sabha stated that 4,540 companies are undergoing CIRP out of which only 394 companies stand resolved with 36% realisation of claims by financial creditors under IBC. A common factor in all the CIRP is that the resolution professional has to run the CIRP with limited funds or mostly with no funds, though Section 14 of the Code provides some relief to the sick company by granting moratorium but the RP still has to