IL&FS has increased the debt recovery target to Rs 61,000 crore
Crisis-ridden IL&FS said on April 15 it had addressed aggregate group debt of Rs 43,000 crore till date through sale of assets and through other cash receivables.
Also, it has increased the debt recovery target to Rs 61,000 crore, the company said as part of its quarterly update on the progress of the ongoing Group resolution process.
“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 approx. Rs 99,000 crore, as of October 2018,” the company said.
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).
“It may be kept in mind that the recovery target is higher than the average recovery observed under IBC since its inception,” the company said.
IL&FS collapsed around August 2018 when it started defaulting on bonds that came due to investors. The company, which started as a road construction financing company, had quietly grown to around 347 subsidiaries and amassed a debt pile of about Rs 91,000 crore by the time the crisis broke out in the group. The NBFC merrily rolled over securities until things came to a grinding halt. Rating agencies, analysts and regulators waited till the last moment to act.
When IL&FS finally started to default on its payments to institutions, it triggered panic in financial markets. In October 2018, the government set up a panel under veteran banker Uday Kotak to set the resolution process rolling in IL&FS empire. Late last year, at the new board’s first AGM, Kotak said through resolution the new board expects to recover at least half of Rs 90,000 crore debt on IL&FS books. That work is still in progress.
Out of total 347 entities under IL&FS Group, as of October 2018, a total of 186 entities stand resolved till date, while the remaining 161 entities are under various stages of resolution, the company said.
“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,” it said.
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 company said.
Asset monetisation
The aggregate addressed debt of Rs 43,000 crore comprises Rs 26,800 crore through 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 Mumbai NCLT and NCLAT and Rs 1,926 crore from Supreme Court verdict passed in favour of Rapid Metro Gurgaon, the company said.
Since January 2021, the company has completed sale of Chongqing Yuhe Expressway, sale of Environment Business, have received settlement claims from NHAI for three road projects–Kiratpur Ner Chowk, Fagne Songadh and Chenani Nashri Tunnel, Received proceeds under IBC resolution of Dighi Port and received operating income in operating road concessions and through sale of power at ITPCL, IL&FS said.
