President nod to bankruptcy code amendment

New Delhi, India, November 23:

The Indian President agreed to an ordinance to revise the Insolvency and Bankruptcy Code, 2016 (the Code).

The government had earlier announced that defaulting corporates seeking a resolution plan under the new law will now be subject to more stringent tests. The Insolvency and Bankruptcy Board of India (IBBI) would test the creditworthiness of the companies.

The changes proposed are expected to help narrow down the process of selecting buyers for stressed assets. Presently the code does not identify the type of buyers who can bid for stressed assets of companies undergoing bankruptcy proceedings.