IL&FS Transportation Networks (ITNL) is looking at a mix of asset sale, fund raising, debt refinance and some renegotiated contracts to tide over its troubles.
Besides its highest ever quarterly loss, the IL&FS group company is facing issues like terminated contracts, projects whose financial closures are pending, and an infrastructure investment trust plan that fell through. For the quarter ended June 2018-19, ITNL reported a loss of Rs 2.48 billion at the standalone level after eight quarters of profitable operations.
In a conference call, the management told analysts it had drawn up a plan, as part of which it wanted to monetise some road assets. It is in advanced stages of bundling three road assets for sale to one single investor. “Three assets are to be sold to one investor, and this plan is at a fairly advance stage; if successful it should see money flowing within the next 60 days. There is another bunch (road projects) for which due diligence is underway,” a senior manager told investors.
In addition to the planned asset sale, the company is in discussion with a large lender to refinance its Rs 40-44 billion debt taken for its Chenani-Nashri tunnel project. “The earlier plan was to refinance through the bond route, but unfortunately the yield has increased and hardened (at high levels). So we have changed the strategy and are now talking to a large bank to refinance the amount,” the manager said in the conference call.
ITNL had earlier started the termination process for some of its road and metro projects. The company has given notice to the authorities for some projects like Rapid Metro Gurgaon, Rapid Metro Gurgaon South, Khed Sinnar Expressway, Kiratpur-Ner Chowk, and for ITNL Road Infrastructure Development Company (IRIDCL), and MP Border Checkpost Development Company (MPBCDCL). Of these, it was considering arbitration for MPBCDCL. In the case of IRIDCL, the management informed investors it was seeking a grant.
The company said there were challenges on the financial closure for three of its seven under-construction projects. One of the seven is now headed for termination. ITNL also has board approval for issuing equity shares on a rights basis to the extent of Rs 30 billion and the process is on. As of June 2018, the company said it had an outstanding debt of Rs 147 billion at the standalone level. Its outstanding order book, after excluding terminated projects, was at Rs 105 billion at the end of the quarter.
The company has filed claims worth Rs 90 billion, the management told analysts on the call. Of this, the company expects to get at least Rs 11 billion for two of its projects in the current financial year.
Reported profit after tax (Rs million)