IL&FS board addresses 57% of targeted recovery value of over Rs 56,000 cr

Last year, in June, the board of IL&FS laid down a road map to resolve 57 per cent of the group’s nearly Rs 1 trillion debt pile

Topics

Infrastructure Leasing and Financial Services Limited | National Company Law Tribunal | Competition Commission of India

The board of Infrastructure Leasing and Financial Services (IL&FS) on Friday said it had addressed nearly 57 per cent of the overall targeted recovery value and nearly 32 per cent of the overall debt by the end of December quarter (Q3FY21). At the end of Q3, approximately Rs 32,000 crore worth of debt had been addressed by the new board of IL&FS and the management of the company. The bioard also maintained its target of addressing a little over Rs 56,000 crore worth of debt of the company by FY22. IL&FS had a debt of Rs 99,000 crore as of October, 2018.

Last year, in June, the board of IL&FS laid down a road map to resolve 57 per cent of the group’s nearly Rs 1 trillion debt pile.

Of the Rs 32,000 crore worth of debt addressed by the management, Rs 21,600 crore was basis cash balance and approximately Rs 10,300 crore is the net recovery expected.

Since September, debt addressed basis cash balance increased by Rs 2,500 crore due to the receipt of settlement amount by IL&FS Solar Power to the tune of Rs 780 crore, receipt of Rs 1,190 crore as tariff payments by IL&FS Tamil Nadu Power, and recoveries of Rs 300 crore in IL&FS financial services (IFIN) from borrowers outside the group.

As of Q2, debt addressed by the new board and the management was to the tune of Rs 19,000 crore, against its target of Rs 26,440 crore. The shortfall of Rs 7,300 crore was rolled over to subsequent quarters. The delay was mainly caused on account of a significant impact of Covid-19, which added time and logistical complexities to the process of completing discussions with stakeholders and in obtaining approvals from lenders, regulators and judicial authorities, the board had said.

The resolution and recovery applications filed with National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have a gross resolution value of Rs 14,400 crore. This includes three road assets to the tune of Rs 7,550 crore, restructuring of IL&FS Tamil Nadu Power for approximately Rs 4,990 crore, and Rs 1,370 crore towards the settlement of amounts to be received by Kiratpur Ner Chowk Expressway Limited and Fagne Songarh Expressway Limited pursuant to termination of the relevant concession agreements; and Rs 200 crore for environment and real estate entities.

Since October 2018, the new board has been successful in obtaining a host of things which has aided the recovery process of the beleaguered company such as getting Securities and Exchange Board of India (Sebi) registration certificate, completing green channel notification for Competition Commission of India (CCI) approval for the InvIT, committee of creditors approval for sale of Terracis Technology, completing the bidding process for IL&FS Group’s stake in ONGC Tripura Power Company with aggregate recovery value of over Rs 3,800 crore; completing of the sale of CPG BPM; and launching the sale process of IFIN’s external non-performing loan portfolio of around Rs 4,700 crore.

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