Govt working to create information system on stressed companies

The government is working on creating an information system to provide basic financial and other details of stressed companies to potential acquirers through the corporate insolvency process, a senior government official said. The move will help bridge the information gap faced by bidders and is expected to generate more interest from international companies in the domestic distressed asset market. “Whenever there is a stressed asset, you need to have some basic information – all financial and nonfinancials,” said corporate affairs secretary Injeti Srinivas.

The Insolvency and Bankruptcy Board of India (IBBI) is looking to create a system by which this information can be disclosed to prospective buyers of companies undergoing insolvency resolution, he said. Not everyone would get equal access to all the information, another government official said. “There will be layers of details. Everybody will not get access to all kinds of information.

Some will have access to superficial information, some who sign confidentiality agreements or pay some fees will have more layers of information and those who get to the stage of filing resolution plans will get further information,” said the government official who asked not to be identified. IBBI chairperson MS Sahoo said the regulator had called for expressions of interest to set up the proposed platform. “The market needs complete information for drawing up value maximising resolution plans. All market participants need to have perfect information symmetry.

With these objectives, the IBBI has invited expressions of interest for a platform for distressed assets,” said Sahooa. #casansaar (Source - PTI, Economic Times)