The National Company Law Appellate Tribunal (NCLAT) has passed an order allowing the successful bidder to acquire a subsidiary of the IL&FS group, namely IL&FS Paradip Refinery Water Ltd. (IPRWL). The sale of the company would help pay off around ₹1,000 crore of debt of IL&FS.

Established by IL&FS to meet the needs of the 15 MTPA Paradip Refinery project under Indian Oil Corporation in Odisha. IL&FS had approached IOC for permission to sell its stake in IPRWL, but did not get it. IL&FS has filed an appeal before the NCLAT, demanding either that IOC acquire 100% of IPRWL at a fair valuation or grant consent to the sale as per the BOOT (Build, Own, Operate, Transfer) agreement. .

IOC argued that the BOOT agreement, valid until 2039, does not allow for divestment before its expiration. NCLAT rejected IOC’s request, allowing IL&FS to sell IPRWL to a bidder meeting the technical and operational criteria of the BOOT deal.

As per instructions from NCLAT, the sale will be completed in accordance with the terms of the resolution framework. IL&FS has repaid ₹38,082 crore to creditors as of September 30, 2024 and is resolving the debts of its 302 entities. NCLAT has set the timeline for resolution of the remaining 58 entities of IL&FS as March 31, 2025 and has accordingly extended the moratorium. The total external debt of IL&FS was ₹99,355 crore as of October 2018, and the fund-based debt was ₹94,215 crore.