The new board and management of IL&FS as part of its quarterly update process on the progress of ongoing group resolution process shared that it has addressed aggregate debt of Rs 43,000 crore till date.
The group has further enhanced its estimates of aggregate debt recovery to Rs 61,000 crore – an increase of Rs 5,000 crore over its earlier estimate of Rs 56,000 crore. The increased estimate represents resolution of nearly 62 per cent of overall fund based and non-fund based group debt of Rs 99,000 crore as of October 2018.
The aggregate debt of Rs 43,000 crore addressed till date represents nearly 71 per cent of the overall revised targeted recovery value of Rs 61,000 crore and 44 per cent of the overall debt of over Rs 99,000 crore as of October 2018.
IL&FS said the recovery target is higher than the average recovery observed under the Insolvency and Bankruptcy Code (IBC) since its inception. Out of total 347 entities under IL&FS Group, a total of 186 entities stand resolved while the remaining 161 entities are under various stages of resolution.
“The new board has been able to maximise the recoveries for all classes of creditors through following a three-pronged strategy of Resolution, Restructuring and Recovery while keeping the tenets of corporate governance and corporate finance in mind,” said IL&FS.
The upgrade in potentially addressable debt by Rs 5,000 crore to Rs 61,000 crore has been largely on account of improved valuations, better operating performance and enhanced recoveries from non-group exposures.
The aggregate addressed debt of Rs 43,000 crore comprises Rs 26,800 crore basis completed entity monetisation initiatives and accrued cash balance, Rs 14,350 crore of additional net recovery expected from resolution and restructuring applications filed with and awaiting approval of the National Company Law Tribunal (NCLT) (Mumbai) and NCLAT and Rs 1,926 crore from Supreme Court verdict passed in favour of Rapid Metro Gurgaon.
Key initiatives that were completed in the period since January 2021 include: Sale of Chongqing Yuhe Expressway, Sale of Environment Business; Receipt of settlement claims from NHAI for three road projects (Kiratpur Ner Chowk, Fagne Songadh and Chenani Nashri Tunnel); Receipt of proceeds under IBC resolution of Dighi Port; Operating income received in operating road concessions and through sale of power at ITPCL.
The period since January 2021 also saw the filing of NCLT application for Phase 1 of IL&FS Group’s Infrastructure Investment Trust (InvIT) with a resolution value of over Rs 9,300 crore across six Road SPVs.
The InvIT, which is being set-up across multiple phases (encompassing 12 Road SPVs) represents one of India’s largest such resolution initiatives and would contribute to significant value enhancement for IL&FS Group stakeholders. The gross resolution value across all completed NCLT / NCLAT filings but awaiting final approval amounts to over Rs 20,450 crore.
In the next few quarters, IL&FS estimates to address Rs 8,000 crore of additional debt by September 2021 which would include: monetisation of stake in ONGC Tripura, Warora Chandrapur and Karyavattom Stadium; Phase 2 of InvIT including 5 Road SPVs; and receipt of expected settlement claims from Road authorities for Khed Sinnar Expressway and Srinagar Sonmarg Tunnel.
Thus, the overall debt addressed is expected to cross Rs 51,000 crore by September 2021. Further, recovery of Rs 10,000 crore is likely to spill over beyond September 2021 on account of various reasons, including procedural complexities.
This includes sale of Paradip Refinery, Mangalore SEZ, Tamil Nadu Water, ILFS Prime Terminals Fujairah, Hill County Properties; Phase 3 of InvIT; Sale of real estate assets including IL&FS Building at BKC in Mumbai and expected receipt of settlement claims for balance road assets among others.