IL&FS Resolution: Recovery of Rs 57K cr expected by March next year


Debt-laden Infrastructure Leasing and Financial Services (IL&FS) on Tuesday said it has addressed debt of Rs 52,200 crore till date and is on course to resolve around Rs 57,000 crore debt by March 2022.

The debt of Rs 52,200 crore addressed till date represents 86 per cent of the overall estimated resolution value of Rs 61,000 crore and 53 per cent of total debt. The data has been shared by the new board and nanagement of IL&FS, as part of its periodic update on the progress of ongoing IL&FS Group resolution.

Uday Kotak, the Managing Director and chief executive officer of Kotak Mahindra Bank, has functioning as non-Executive Chairman of IL&FS since 2018.

In April this year, the group had revised its estimates for aggregate debt recovery to Rs 61,000 crore beyond September 2021, representing resolution of 62 per cent of overall – fund based and non-fund based – debt. The group’s overall debt stood at Rs 99,000 crore, as of October 2018.

This overall resolution estimate by Il&FS is significantly higher than the average recovery observed under IBC 2016, since its inception.

Of the 347 entities under IL&FS Group as of October 2018, a total of 235 entities stand resolved till 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 Rs 4,000 crore debt across 97 entities to move beyond March 2022 and thus achieve its overall debt resolution estimate of Rs 61,000 crore.

The aggregate debt addressed of Rs 52,200 crore till-date comprises Rs 14,100 crore of debt discharged, available cash balance of Rs 16,700 crore, Rs 13,200 crore from cases approved by the courts and pending transaction closure on account of documentation and other closing requirements, and balance Rs 8,200 crore from applications filed with courts which are pending approval.

Since the last update in July 2021, the group has addressed additional debt of Rs 8,500 crore from monetisation initiatives including: InvIT Phase 1; Terracis Technology (erstwhile IL&FS Technologies); ONGC Tripura Gas based power project; Warora Chandrapur Road project, and IL&FS Prime Terminals Fujairah.

In addition, it has also submitted an application with the NCLT seeking approval for transfer of five road projects, with approximate resolution value of Rs 4,000 crore, under Phase 2 of the InvIT and has launched sale process of IFIN’s external non-performing loan portfolio of around Rs 4,300 crore under Swiss Challenge.

The selection and finalisation of H1 bidder in the TIFC sale process (IL&FS headquarters in Mumbai) is also underway.

Apart from Covid impacting the resolution process, the new board also encountered several challenges during the year, including delays in receipt of annuities from some state governments, challenges in securing consent from other stakeholders including lenders, shareholders and joint venture partners and authorities, and ongoing legal proceedings, litigation and arbitrations by different lender groups, sub-contractors and authorities.

The group continues to implement its three-pronged strategy of Resolution, Restructuring and Recovery to maximise recoveries for all classes of creditors, while adopting an equitable distribution approach and balancing the interests of stakeholders.