The News Scroll 26 May 2020  Last Updated at 10:52 pm | Source: PTI

Nearly 60pc cases admitted into CIRP still under resolution process: Report

Nearly 60pc cases admitted into CIRP still under resolution process: Report
Mumbai, May 26 (PTI) Around of 60 per cent of 3,774 cases admitted into the corporate insolvency resolution process as of March-end are still in the recovery mechanism, a report said.

"Of the total 3,774 cases admitted into CIRP (Corporate Insolvency Resolution Process) at the end of March 2020, 57 per cent of the cases continue to still remain in the resolution process, while 914 (24 per cent) have ended into liquidation," Care Ratings said in a report.

The Care Ratings report further said that around 9 per cent of the cases have been closed on appeal or review and 4 per cent have been withdrawn under Section 12A.

Of the cases withdrawn 41 per cent were less than Rs 1 crore, it said adding that the primary reason for this has been either the full settlement with the applicant (24 per cent) or other settlement with creditors (29 per cent).

Only 6 per cent of the total cases have ended in approval of resolution plans, it added.

Meanwhile, of the 3,700 companies being admitted for CIRP, a significant number on a cumulative basis are being filed by the operational creditors followed by the financial creditors.

The cumulative share of operational creditors increased from 51 per cent at the end of first quarter of FY20 to 56 per cent at the end of fourth quarter of FY20, while financial creditors'' share remained at similar level as at the end of the first quarter of FY20.

Of the overall cases admitted the manufacturing sector accounted for the highest share at 40 per cent followed by the real estate (20 per cent), construction (11 per cent) and trading sectors (10 per cent), it said.

Within the manufacturing domain, basic metals (7 per cent) and textile (7 per cent) sectors continued to have the largest cumulative number of cases admitted under the IBC, it added.

The report also said that implementation of the IBC has improved the overall recovery rate to 45.9 per cent from the earlier 26 per cent. PTI SM MR MR

Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI
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