IL&FS Transportation Networks Limited (ITNL), the road development arm of IL&FS Group, has informed stock exchanges regarding defaults in road and metro projects by nodal authorities.

The clarification comes after yet another series of debt downgrades by rating agencies that have also warned of the possibility of project termination by the special purpose vehicles (SPVs) floated by several companies.

ITNL Road Infrastructure Development Company Limited (IRIDCL) and MP Border Checkpost Development Company Limited (MP Border) reported delays in loan repayment obligation due on June 30, 2018, CARE Ratings Limited (CARE) said in a separate coverage of these SPVs earlier this month. Last week, CARE downgraded the company’s long- and short-term bank facilities totalling ₹3,286 crore. In its latest note, the agency said ITNL did not extend its support for SPVs, unlike in the past, and has initiated termination of projects under these SPVs.

The downgrade action followed as ITNL’s de-leveraging efforts through stake sale or equity infusion have not materialised. Realisation of the company’s claims from the authorities, too, has not happened as expected.

Earlier this month, another rating agency ICRA Limited downgraded two SPVs of ITNL — Rapid Metrorail Gurgaon South Limited and Rapid Metrorail Gurgaon Limited. In May, ICRA downgraded the long-term borrowings of ITNL amounting to ₹4,570 crore, placing the ratings under watch with developing implications.

A detailed query emailed to the ITNL spokesperson on Saturday did not elicit any response till the time of going to press on Sunday.

ITNL’s debt at the consolidated level was around ₹36,000 crore and the company would need to raise debt of around ₹7,000 crore to complete ongoing projects, Dillip Bhatia, ITNL CFO, had said in an analysts call in May.

According to a source close to the company, who spoke on conditions of anonymity, the road developer has been actively refinancing its debt through the NCD route as other options remained limited.

The company will now have to rely on the support of its parent, IL&FS, the person noted. According to him, receiving claims from various government agencies totalling ₹5,000 crore have not seen any progress despite NITI Aayog’s 2016 circular mandating that government agencies must pay 75 per cent of the arbitral award amount to the developers. ITNL has claims of more than ₹5,000 crore pending against various agencies.

ITNL has one of the largest BOT portfolios in the country comprising 33 projects, out of which 28 are in the roads sector and five in metro and other segments. The company has four EPC projects, including the ₹4,899-crore Zojila Pass tunnel project. The company’s order book stood at ₹10,618 crore in BOT and ₹5,424 crore in EPC space, with additional $232 million from international orders as on March, 31, 2018.

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