IL&FS Board looks to resolve 57% of total debt of Rs 99,000 cr

The new board, appointed by the Central Government and led by Uday Kotak as non-executive chairman, highlighted the key initiatives taken, progress made till June 30
IL&FS' new board on Monday said the group looks to resolve debt worth Rs 50,500 crore by the end of the current financial year and revised its estimate for debt resolution upwards to 57 per cent.

The group’s overall debt stands at around Rs 99,000 crore. 

While the group’s debt resolution amount has been revised upwards, the timeline has seen a delay. In an update given in October, the new board had said it expected at least half of the group’s debt to be resolved, recovered or restructured and to do a significant portion of that by March 2020.

The new board, appointed by the Central Government and led by Uday Kotak as non-executive chairman, highlighted the key initiatives taken, progress made till June 30 and revised timelines to complete the resolution process for the IL&FS Group on Monday. Other members of the board include Vineet Nayyar as vice chairman, C S Rajan as MD and Bijay Kumar as Deputy MD, and other officials. 

On Monday, the board said, the aggregate value of debt being addressed is now estimated as over Rs 57,000 crore, with around Rs 50,500 crore likely to be addressed by March 2021. Members of the board said on the media call that Covid-19 has also impacted the resolution timeline. In a particular road asset sale, the board said an Italy-based lowest bidder withdrew the bid after the pandemic hit.

The Board in its statement added, “The revised value accounts for over 57 per cent of overall debt and is significantly higher than the average realisation till date, for financial creditors under the Insolvency and bankruptcy Code (IBC) process.”

Up to June, IL&FS has addressed debt of Rs 17,640 crore, which the Board said was through a combination of - completed asset sales, debt repayment to green entities, debt discharged in non-green entities and available cash balance across the Group.

Based on a timeline shared by the group, IL&FS looks to address another Rs 8,800 crore debt by September-end, followed by an additional Rs 18,000 crore resolution in the December quarter and another Rs 6,150 crore for the March quarter. “Efforts towards resolution of additional debt of Rs 6,650 crore are likely to continue beyond FY21,” the statement added.

IL&FS Board’s Group resolution framework, received the National Company Law Appellate Tribunal (NCLAT) approval on March 12. The group also looks to set an Infrastructure Investment Trust (InvIT) for its road assets with a gross value target of Rs 13,000 crore in the December quarter.

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