India's company law appellate tribunal granted a moratorium on all creditor proceedings against Infrastructure Leasing & Financial Services Ltd. and its group companies, allowing the debt-laden company time to form an orderly resolution plan.
IL&FS said Oct. 15 that the National Company Law Tribunal passed an interim order granting a moratorium on all creditor actions. The moratorium prohibits the initiation or continuation of legal proceedings over assets of IL&FS and its group companies, as well as restricts creditors from accelerating or making demands for payment of their credit facilities.
The move will allow the value preservation of IL&FS' assets and help its new board of directors to evaluate and prepare a resolution plan. The moratorium will continue until further orders and the next date of hearing is scheduled for Nov. 13.
The Indian government moved to take over IL&FS earlier in October in an effort to prevent further defaults in the company and to avoid a large systemic risk in the financial market. The government's move followed several defaults by IL&FS and its group of companies on their payments obligations in August and September.