Logistics

IL&FS arm gets nod for Chenani Nashri Tunnelway sale to Cube Highways

Our Bureau Mumbai December 3 | Updated on December 03, 2020

Retd Justice Jain directs IL&FS to seek approval from NCLT and NHAI

IL&FS has got the nod to sell Chenani Nashri Tunnelway Ltd (CNTL) to Cube Highways.

Retired Justice D K Jain, who is overseeing the IL&FS resolution and divestment process, granted the approval for the sale of CNTL, which is a wholly-owned subsidiary of IL&FS Transportation Networks India Ltd (ITNL).

Cube Highways and Infrastructure Pte is a Singapore-based company, which has made India-related investments in infrastructure. In December 2018, IL&FS had invited bids for sale of its road assets and received around two dozen bids. Subsequently, Cube had bid Rs 3,900 crore for acquiring the complete 100 per cent stake in CNTL. The Chenani-Nashri tunnel project also cuts down the distance between Jammu and Srinigay by 31 kilometres. The two-lane tunnel was launched with a project cost of Rs 5,269 crore in March 2017, with concession period up to March 2032.

Further, Jain has directed IL&FS to seek approval from NCLT and highways authority NHAI to complete the sale. The Committee of Creditors of ITNL and CNTL have approved the sale.

Resolving debt

The proceeds of the sale will be distributed in accordance with the resolution framework approved by NCLT. If this sale goes through, it will address around Rs 4,910 crore of IL&FS debt, the company said. This development follows IL&FS getting the green signal to sell Jorbat Shillong Expressway Ltd (JSEL) to Sekura Road Ltd (SRL).

In its latest progress report, IL&FS said that it has resolved Rs 19,100 crore of the group’s debt. It has around Rs 99,000 in total debt. So far, IL&FS has sold off the education business, Schoolnet India Ltd, to Career Point Publications Pvt Ltd (CPPPL). In the Schoolnet India sell off, Jain approved sale on conditions that IL&FS will place the proposal before NCLT for approval and the realised amount to be kept in an escrow account. This was subsequently to be disbursed in accordance with the directions of the NCLT and the National Company Law Appellate Tribunal (NCLAT).

Additionally, it sold off its wind energy business to Japanese company ORIX and repaid debt in green category companies. In November, IL&FS said that a buyer has submitted a binding offer for acquiring IL&FS Energy Development Company Ltd (IEDCL), its energy advisory subsidiary business as a going concern.

The Uday Kotak-led board in its progress report reiterated that its target of addressing Rs 50,000 crore of the group’s bad debt by March 2021 is on track, despite some hiccups caused by the pandemic, which has delayed resolution.

Further, IL&FS has already got “in-principle” approval from SEBI to form an InvIT for 11 road assets in two phases, as a part of its monetising efforts.

Published on December 03, 2020

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