On May 27, 2020, The principal bench of National Company Law Tribunal (NCLT) has given its nod to sell 50% stake in Gujarat International Finance Tec-City Co Ltd (GIFT City) held by crisis hit Infrastructure Leasing and Financial Services (IL&FS) to the Gujarat state government for an aggregate consideration of Rs 32.70 crore.
Key Points:
i.3.27 crore shares with face value of Rs 10 each of the GIFT City Company Limited (GIFTCL) or GIFT CIty to the Gujarat Urban Development Company Ltd ( GURDCL) were decided to be sold by the NCLT bench headed by acting president B S V Prakash Kumar.Â
ii.IL&FS and the state government through Gujarat Urban Development Co Ltd hold 50:50 stake in GIFT City, which involves construction of a multi-services Special Economic Zone (SEZ) and the International Finance Services Centre (IFSC).
iii.Background:
- IL&FS had entered into a Memorandum of Understanding (MOU) with the Gujarat government to develop an International Financial Services City (IFSC)in 2007. The integrated township was a joint venture provided with exit option with a right of first refusal of either party.
- In 2019, IL&FS has issued Expressions of Interest (EoI) its entire real estate assets held by its 3 subsidiaries across Mumbai, Kolkata and Hyderabad totalling 4.85 lakh square feet for sale at around Rs 3,500 crore. Significantly, the Gujarat government had indicated their willingness to take over the project.
The firms also decided to sell 9 road assets with total debt of over Rs 11,000 crore through an Infrastructure Investment Trust (InvIT).
iv.IL&FS chairman Uday Kotak headed overseeing the significant portion of the company’s debt by July 2020. Shareholders of the IL&FS Board assured to recover around 50 % of the Rs 90,000 crore of debt. The panel also assured shareholders that around Rs 45,000 crore can be recovered under very complex situation.
About Infrastructure Leasing & Financial Services (IL&FS):
Headquarters– Mumbai, Maharashtra
Chairman– Uday Kotak
About Gujarat:
Capital– Gandhinagar
Chief minister– Vijay Rupani
Governor– Acharya Devvrat
About National Company Law Tribunal (NCLT):
Headquarters– New Delhi
Officiating Chairperson– Justice Bansi Lal Bhat
