Mumbai: IL&FS has received approval from the National Company Law Tribunal (NCLT) to move six of its road projects to an Infrastructure Investment Trust (InvIT). The projects will be transferred to the InvIT at an aggregate valuation of ₹9,214 crore, determined by an independent valuer appointed in accordance with the InvIT regulations of the Securities and Exchange Board of India (Sebi).
The six road projects — Barwa Adda Expressway Limited, Baleshwar Kharagpur Expressway Limited, Sikar Bikaner Highway Limited, East Hyderabad Expressway Limited, Moradabad Bareilly Expressway Limited and Jharkhand Road Projects Implementation Company Limited — will be transferred to the newly formed Roadstar Infra Investment Trust under its InvIT phase I, based on approvals from the authority and lenders.
The ₹9,214 crore valuation presents a significantly improved recovery for creditors of these SPVs as well as group companies that have provided debt to these SPVs, the company said.
On transfer to the InvIT, these six SPVs would move away from debt servicing moratorium extended to IL&FS Group companies and will start servicing their debt, resulting in resolution of these SPVs.
IL&FS proposes to address more than ₹16,000 crore in debt through InvIT in phases. NCLT’s approval for Phase I is part of the said process. IL&FS will add additional five road assets in Phase 2, on receipt of applicable approvals.
The InvIT has already received final registration from Sebi and all constituents to form the InvIT have been put in place.
State Bank of India, Punjab National Bank, Canara Bank, Bank of India and Indian Overseas Bank are some of the key lenders to IL&FS Transportation Networks Limited (ITNL), a subsidiary of IL&FS, and will benefit from the formation of this InvIT.
IL&FS InvIT will be the first of its kind vehicle for resolution of debt owed to lenders of ITNL and other group entities and it forms an important part of the overall group resolution framework adopted by the new board.
Being one of the larger InvIT in the road sector, the proposed InvIT has the potential to become a strong infrastructure player in the country, with appropriate management team and supervision.
The InvIT could act as a growth vehicle and add value to the initial unit holders who will be the lenders of the Group, the company said.
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