The Resolution Consultant has classified the 169 IL&FS group entities into two types, based on a 12 month cash flow-based solvency test.
The classification were made to MCA as a part of its fifth progress report.
The classification
The first type includes an entity which has no payment default or overdues. Additionally, it includes future cash flows in the “testing period” from its operations and available cash balances to meet all payment obligations.
This includes the entity’s operational and financial (secured and unsecured lenders) during the testing period. This includes those entities which do not rely on other IL&FS group entities for any financial support to service its financial and operational debt obligations. These have been categorized as ‘green’.
Those entities which do not meet the above-mentioned criteria have been re-categorised as ‘amber’ and ‘red’.
The ‘amber’ categorised entities are ones which are able to meet only operational payment obligations and payment to senior secured financial creditors during the testing period, the company said. It will classify entities as ‘red’ for those can’t meet any payment obligations, during the testing period.
So far, IL&FS has categorised 169 of its 302 entities, which are under its jurisdiction. Of the 169 Indian entities, the Resolution Consultant has classified 158 and the remaining 11 companies’ classification is currently underway.
Progress report
Currently, 55 entities have been classified as ‘green’, 13 as ‘amber’ and 82 as ‘red’. Another 8 entities have been declared as insolvent and are undergoing IBC proceedings.
IL&FS Board also said that the ‘red’ entities owe ₹61,375 crore. The ‘amber’ entities owe ₹16,372.6 crore and ‘green’ entities owe ₹11,022.9 crore. The 11 which are yet to be classified owe a debt of ₹5,895.9 crore.
The progress report also said that the assets for which sale process has been launched so far (except certain non-core assets) account for approximately ₹50,000 crore of the total outstanding fund based debt exposure of ₹94,000 crores.
Further, it also mentioned that in its overseas operations, several of its employees had been kidnapped and harassed.