JM Financial Asset Reconstruction Company’s resolution activities revolve around the core idea of maximisation of realisation from each distressed account it acquires. Our resolution strategies are geared towards reviving the accounts in the interest of all stakeholders.
Under the extant Reserve Bank of India (RBI) guidelines, Asset Reconstruction Companies (ARCs) are empowered to adopt one of the following resolution strategies or a combination thereof, for reconstruction of the acquired assets:
- Change in or takeover of management of the business of the borrower
- Sale or lease of part or whole of the business of the borrower
- Rescheduling of payment of debts payable by the borrower
- Enforcement of security interest
- Settlement of dues payable by the borrower
- Convert any portion of debt into shares of a borrower company
The choice of resolution strategy primarily depends on the operations of the borrower, quality and expertise of the company’s top management and marketability of the company’s assets. The resolution mechanism we implement is fair, transparent and closely monitored by our asset resolution committee. Our resolution processes are governed by our Financial Asset Resolution Policy, framed under the extant guidelines for ARCs. The aim is always to adopt a resolution strategy that is fully compliant and in accordance with the extant RBI guidelines.
Being driven by the value that the primary objective in resolution should always be to revive viable accounts, before enforcing security or settling them; is what sets our philosophy apart.
