IL&FS group to settle debt of Rs 55,000 cr by March

IL&FS Group would resolve a debt of Rs 55,000 crore by March 2022, the crisis-hit company’s board said in its affidavit filed in the National Company Law Appellate Tribunal (NCLAT). While updating the progress of the resolution, the IL&FS board, led by Uday Kotak, said the Rs 55,000 crore debt would be resolved through asset monetization, restructuring and recovery initiatives. insolvency proceedings.

Some of this has already been completed while the rest is in various stages of resolution, he said in a brief overview of progress in the ongoing resolution process through December 7, 2021, and suggested ways forward. estimates of progress to be made by March 2022.

The IL&FS had a total outstanding debt of Rs 99,355 crore as of October 8, 2018, of which a debt of Rs 45,500 crore is managed through debt resolution initiatives by March 2022.

Of this amount, debt of Rs 20,500 crore has already been resolved through monetization, Rs 4,000 crore through discharged debt and Rs 21,350 crore in cash available in business and Invit unit (Infrastructure Investment Trust ) that must be issued.

In addition, the board also plans to resolve Rs 5,300 crore through various “court-approved transactions and pending transaction closing” and Rs 4,200 crore resolution applications filed with the courts. and pending approvals.

“As of January 4, 2021, the total number of Respondent #1 Group (IL&FS) entities has increased from 302 to 111,” the affidavit reads.

In this, domestic IL&FS entities were reduced to 95 from 169, while offshore entities were reduced to 16 from 133.

The Board had requested that 29 of the 60 entities be resolved through the entity monetization process; 12 road assets under Invit; 3 assets whose concession has been terminated and 30 entities for which it has initiated closure or insolvency proceedings.

“A key objective of the new Board has been to maintain the going concern status of the Respondent #1 Group. The Respondent #1 Group has also focused on multiple resolution initiatives, including accelerating the recovery of loans and investments provided/made by Respondent No I Group, the amounts of which will be used to satisfy the claims of creditors of the relevant Respondent No I Group entities in accordance with the Revised Distribution Framework approved by this court (NCLAT) in judgment dated March 12, 2020,” the affidavit reads.

This also resulted in an accumulated cash balance of Rs 16,742 crore as of December 7, 2021.

On March 12, 2020, the NCLAT had approved a distribution framework based on a “pro rata distribution” among creditors of the debt-ridden IL&FS group from the proceeds of the sale, as suggested by the government.

In September 2021, the government extended Uday Kotak’s tenure as IL&FS President by six months. Kotak, managing director and CEO of Kotak Mahindra Bank, has been appointed by the government to help the crisis-ridden IL&FS out of their mess.

In line with IL&FS’ roadmap, its group companies have been classified into three categories – green, orange and red – based on their respective financial positions.

Companies in the green box will be those that continue to meet their payment obligations.

The amber category is for companies that would not be able to meet their obligations but can only meet operational payment obligations to senior secured financial creditors. Entities in the Amber category “are authorized to make only those payments necessary to maintain and preserve the going concern”.

“Companies falling into the red category are those entities that cannot meet their payment obligations to even senior secured financial creditors,” according to the plan.

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