The new board and management of Infrastructure Leasing and Financial Services (IL&FS) has addressed debt of ₹52,200 crore, and has maintained its earlier estimate of resolving debt of ₹61,000 crore.
This will represent resolution of 62 per cent of the overall fund-based and non-fund based debt of over ₹99,000 crore as of October 2018.
“The debt of ₹52,200 crore addressed till date represents 86 per cent of the overall estimated resolution value of ₹61,000 crore and 53 per cent of total debt,” it said on Tuesday.
It expects to resolve around ₹57,000 crore debt by March 2022, it further said.
Available cash balance
Uday Kotak, Chairman of the board of IL&FS, said that of the ₹52,200 crore debt addressed, ₹14,100 crore has been discharged and there is an available cash balance of ₹16,700 crore. “In addition to that, we have completed sale and purchase agreements in many cases and have filed applications with the NCLT. These are in stages of completion of transactions and are pending court approval. That amount is ₹21,000 crore,” he told reporters, adding that the balance ₹4,000 crore will be the long tail, including refunds and small matters across the whole host of companies.
He said that there are multiple options for the resolution of the long tail, such as liquidation, fire sale or the current approach of hard work.
He, however, indicated that this would be decided in due course. Kotak also highlighted the high recovery from IL&FS, and noted that it is much higher than the average recovery observed under the Insolvency and Bankruptcy Code, which is around 38 per cent to 39 per cent. “Group resolution is always a big challenge in terms of recovery in IBC cases. Many cases have had very low recovery numbers. This (IL&FS) reinforces the belief that fair amount of money can be recovered even from the most distressing and complex situations,” he said.
Further, of the 347 entities under IL&FS Group as of October 2018, a total of 235 entities stand resolved till date, including resolution applications filed with courts, and applications for additional 15 entities are expected to be filed with courts by March 2022.
“Since the last update in July 2021, the group has addressed additional debt of ₹8,500 crore from monetisation initiatives, including InvIT Phase 1; Terracis Technology (erstwhile IL&FS Technologies); ONGC Tripura Gas based power project; Warora Chandrapur Road project; and IL&FS Prime Terminals Fujai,” said an IL&FS statement.
Transfer of road projects
Additionally, the group has also submitted an application with the NCLT for approval of the transfer of five road projects, with approximate resolution value of ₹4,000 crore, under Phase 2 of the InvIT.