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After reviewing more than 165 entities within the IL&FS Group, the new Board of the debt-laden and cash-strapped IL&FS Group said it found close to 100 entities with operational cash gap till March 31, 2019.
What this means is that these 100 entities could default on their debt obligations.
Over the last few months, IL&FS and some of its arms have defaulted on banks loans, commercial papers and non-convertible debentures.
As per a report submitted by IL&FS to the Ministry of Corporate Affairs, some of the key entities which will face the cash gaps include IL&FS, ITNL, Elsamex (India) and several other subsidiaries of ITNL, IL&FS Energy Development Company Ltd (the holding company for the energy vertical) and several of its subsidiaries, IL&FS Engineering & Construction Company Ltd, IL&FS Environmental Infrastructure & Services Ltd Holding company and several of its subsidiaries, IL&FS Skill Development Corporation Ltd, IL&FS Technologies Limited Holding Company, IL&FS Township & Urban Assets Ltd, IL&FS Maritime Infrastructure Company Limited Holding company.
As part of the liquidity management exercise, the report said the Resolution Advisor (Alvarez & Marsal India Pvt Ltd) has undertaken steps to assess short and medium-term liquidity requirements of various entities, develop 13-weeks cash flow forecast to optimise cash flow, prioritise outflows that will enable the entity to generate further cash inflows to ensure operational sustenance and implement a robust control mechanism and provide update to the new board.
As part of the process to develop a resolution plan for the IL&FS Group, the Resolution Advisor has initiated and is in the process of reviewing the existing capital structure of entities within the IL&FS Group, assessing incremental funding requirements for capex/working capital at the relevant entity level, classifying entities based on debt service ability and viability, the report said.
The Advisor is also assisting in identifying entities suitable for monetisation, and identifying encumbrances created on assets of various entities within the IL&FS Group and approvals for divestment at holding company level (i.e. IL&FS), business vertical/ platform level and at the level of the operating SPVs (special purpose vehicles).
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