IL&FS expects to recover Rs 45,000 cr

The IL&FS Board expects recovering around 50 per cent of the Rs 90,000 crore, on the back of the measures it has undertaken so far and is working towards resolving significant portion of debt by July 2020.

In its 32nd AGM and the first under a new Board overseen by the government and headed by Uday Kotak, the bankrupt NBFC in his maiden address assured shareholders that around Rs 45,000 crore can be recovered under very complex circumstances. “The combination of complex group structure comprising financial services, infrastructure and other businesses, high level of debt and diverse nature and type of creditors at various levels of the Group represent a very unique scenario which is far removed from other well-known cases of distressed Indian companies in the recent past,” he said.

The absence of requisite legal framework for group resolution under IBC required the new Board to propose the first-of-its-kind resolution framework that balanced interest of stakeholders across classes and levels, while keeping broad principles of corporate finance in mind, added Kotak.

The Chairman also pointed out that “Resolution, Restructuring and Recovery” formed the 3 vital pillars of the strategy adopted by the new Board, and it is committed to completing the resolution process at the earliest and is working towards addressing significant portion of addressable debt by July 2020.

Kotak pointed to a range of initiatives that can help the debt to be reduced by 50 per cent. IL&FS sold off its stake in 7 wind power SPVs for Rs. 4,300 crore to ORIX. Further, IL&FS has received a binding bid for its Chinese Road Asset that will resolve nearly Rs 1,600 crore debt and additional Rs 980 crores towards equity value for the shareholding entity. Additionally, IL&FS has received binding bids for 10 road assets. 5 assets with combined financial debt of Rs 9,500 crores, referred to respective creditor committees for next steps.

The entity will also look to monetise through an Infrastructure Investment Trust (InvIT) being set-up for 9 road assets with total debt of more than Rs 11,000 crores. Extensive discussions are ongoing with concession authorities to expedite release of claims in excess of Rs 5,000 crores filed by Group’s transportation vertical.

IL&FS has also got an approval from the Gujarat government to purchase the Group;s stake in Gujarat International Finance Tec-City (GIFTCL), which will resolve debt of Rs 1,200 crores.

Plans are also on to sell the group-wide real estate assets with estimated value of around Rs 3,500 crores. “The debt restructuring completed for 3 assets with total debt of INR 5,100 crores. These assets have now started servicing all debt obligations. Discussions ongoing for restructuring of further Rs 10,000 crores of financial debt, stated Kotak.

The Board which had identified companies in amber, green and red, signifying their financial status, said that over 40 “Green” companies are regularly servicing nearly Rs 7,200 crores of debt.

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