IL&FS Addresses Debt Worth Rs52,200 Crore; Maintains Resolution Estimate at Rs61,000 Crore by March 2022
Moneylife Digital Team 02 November 2021
The crisis-hit Infrastructure Leasing and Finance Ltd (IL&FS) group has addressed a debt of about Rs52,200 to date. The group also maintained its earlier estimate of resolving debt of Rs61,000 crore, representing a resolution of 62% of overall—fund-based and non-fund based—the debt of over Rs99,000 crore as of October 2018. 
 
In a release, IL&FS says, “The debt of Rs52,200 crore addressed till date represents 86% of the overall estimated resolution value of Rs61,000 crore and 53% of total debt. The group estimates to resolve around Rs57,000 crore debt by March 2022.”
 
This overall resolution estimate is significantly higher than the average recovery observed under Insolvency and Bankruptcy Code 2016 since its inception, it added.
 
The aggregate debt addressed of Rs52,200 crore till-date comprises Rs14,100 crore of debt discharged; available cash balance of Rs16,700 crore; Rs13,200 crore from cases approved by the courts and pending transaction closure on account of documentation and other closing requirements; and balance Rs8,200 crore from applications filed with courts which are pending approval.
 
Of the 347 entities under the IL&FS group as of October 2018, a total of 235 entities stand resolved to date, including resolution applications filed with courts, and applications for additional 15 entities are expected to be filed with courts by March 2022.
 
“The group estimates resolution of the remaining nearly Rs4,000 crore debt across 97 entities to move beyond March 2022 and thus achieve its overall debt resolution estimate of Rs61,000 crore,” IL&FS added.
 
The crisis-hit group says it has also submitted an application with the National Company Law Tribunal (NCLT) seeking approval for transfer of five Road projects, with an approximate resolution value of Rs4,000 crore, under phase-2 of the IL&FS’s Infrastructure Investment Trust (InvIT), and has launched sale process of IFIN’s external non-performing loan portfolio of around Rs4,300 crore under Swiss challenge. The selection and finalisation of a higher (H1) bidder in the TIFC sale process (IL&FS headquarters in Mumbai) is also underway.
 
 IL&FS was declared insolvent in September 2018 after it failed to honour its debt distributed among its 347 group companies. The complex nature of IL&FS and the risk it posed to the financial system has led to some new regulations. One among the regulations was RBI putting a cap of two core investment companies (CICs) within a corporate group. 
 
To address the complexity in group structures and the existence of multiple CICs within a group, last year in August, RBI decided to restrict to two the number of layers of CICs within a group, irrespective of the extent of direct or indirect holding by a CIC.
 
Comments
pdk_7
2 months ago
What happens to investment made by indivduals in ILFS preferences ? There is no information forthcoming from anyone on this aspect .
Meenal Mamdani
3 months ago
This is thanks to Uday Kotak who worked for this resolution.
Usually the others who work in this area are in cahoots with the defaulters and thus get very little on the surface while enriching themselves surreptitiously.
All who work in this I&B Code should be investigated thoroughly.
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