Secured lenders of four of the amber entities of IL&FS have rejected the proposals for restructuring of debt. The response of the lenders was recorded at a hearing of the National Company Law Appellate Tribunal (NCLAT) in Delhi on September 4. Most of these companies were executing road projects.
However, three other erstwhile entities, Moradabad Bareilly Expressway Limited (MBEL), Jharkhand Road Projects Implementation Company (JRPICL) and West Gujarat Expressway Limited (WGEL) have executed agreements with lenders to resturcture the debt and are making progress with the term sheets. They would be re-classified as “green entities,” meaning the payments would be made to creditors and no further defaults would take place.
In the case of another ‘amber’ entity, ITNL Road Infrastructure Development Company (IRIDCL), the settlement agreement contemplates settlement amount namely Rs 144.08 crore from the concessioning authority, the Department of Road Transport and Highways.
Moves are afoot to find a resolution for the remaining nine ‘amber’ entiies. In the case of Jorabat Shillong Expressway Limited (JSEL), the proposal contemplates a 42 per cent haircut on the overall debt of JSEL to both secured and unsecured creditors. In response to the proposal, UTI Mutual Fund rejected it while Welspun Corp and Trust Investment Advisors while agreeing to a reduction in interest rate did not consent to a haircut on the debt. Owing to the rejection, JSEL is unlikely to be reclassified as a ‘green’ entity, which means that should be no payment default.
Similarly in the case of another ‘amber’ entity, Chenani Nashri Tunnelway Limited (CNTL), the lead bank State Bank of India (SBI) rejected the proposal, while one of the other secured lenders, Indian Bank did not agree to a haircut for senior lenders. Another secured lender, Standard Chartered Bank agreed to the restructuring with some conidtions. Two of the external unsecured financial creditors of CNTL, namely Indusind Bank and Aditya Birla Finance presented counter proposals. Following no agreement, CNTL is also unlikely to have any change in its ‘amber’ status.
In the case of Thiruvananthapuram Road Development Company (TRDCL), Punjab National Bank (PNB) has communicated its decision not to accept any haircut and instead urged the company to recover pending annuities from the concessioning authority.
In the case of IL&FS Education and Technology Services Limited (IETS), no haircut is involved but only reduction of interest and extension of payments schedule is being sought. Two unsecured lenders, IndiaFirst Life Insurance and Hewlett Packard Financial Services have provided their in-principle confirmation. State Bank while agreeing to a reduction in interest rate subject to some conditions did not agree to extend the payment schedules.
Bhopal Cooperative Central Bank has conveyed its inability to accept the proposal. The proposal is yet to receive a response from lenders like Birla Sunlife, Yes Bank, Bank of Bahrain and Axis Bank. Given the lack of consent from all the lenders, the company is unlikely to be classified as ‘green’.
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Source: NDTV Profit