How is this different from restructuring under the Sick Industrial Companies (Special Provisions) Act 1985 (SICA)?
SICA only applies to certain industries which have been specified in the Industries (Development and Regulation) Act 1951. A sick company is one which has incurred loses in consecutive years and has an asset to liability ratio which is below a specified minimum. The board of directors of a sick company is obliged to refer the company to BIFR, which has wide powers to restructure sick companies. If BIFR is satisfied that the company requires restructuring, it will appoint an operating agent, usually the lead lender, to prepare a restructuring scheme. A restructuring scheme sanctioned by BIFR is binding on the members as well as creditors of the company. However, if the company requires concessions or additional funding from a creditor, that creditor must approve the scheme before it is sanctioned by BIFR.
Related Questions
- We are sick of replacing our shop-style vacuums every time they break (which is a lot). How is an industrial vacuum cleaner different than a shop-style vac?
- What is special about Wellness Formulations, LLC that makes it different from other skin care companies?
- How is Special Memories different from other companies?
