The new board of debt-laden Infrastructure Leasing & Financial Services (IL&FS), headed by Uday Kotak, on Monday said it expects to resolve about ₹57,000 crore of its total debt of ₹99,000 crore despite delays in the resolution process due to the pandemic. This will be done through a mix of sale of group companies, debt restructuring, recovery of loans, and sale of real estate assets.
Setting up InvITs, SPVs
IL&FS also proposes to set up InvITs with a targeted gross value of ₹13,000 crore, which include creating three Special Purpose Vehicles (SPVs). Debt worth ₹5,000 crore will be restructured through the InvITs.
Addressing media persons, Non-Executive Chairman Uday Kotak said, “We are putting out transparently things that we see today and our reasonable estimate of how things look as we go forward. We are committed to this roadmap and we will go all out as IL&FS board and management to make it happen.”
The company said sale of 15 entities are in advanced stages and as of June, a total debt of ₹17,640 crore has been resolved. Around ₹8,800 crore will be resolved by the second quarter, ₹18,000 crore by the third and another ₹6,000 crore by the end of the financial year. All this will aggregate to ₹50,500 crore by March 2021.
Further, efforts to resolve an additional ₹6,600-crore debt may continue beyond FY21, as the new board expects the resolution of major holding companies to take longer. Overall, the IL&FS board expects to resolve ₹57,000-crore debt. This also means that the remaining ₹43,000-crore debt will be unresolved and lenders may have to take a hair cut. The revised value accounts for over 57 per cent of IL&FS’ overall debt and is significantly higher than the average realisation till date under the IBC process, Kotak added.