IL&FS Group will resolve the debt of Rs 55,000 crore by March 2022, the board of the beleaguered company has said in its affidavit filed before the National Company Law Appellate Tribunal (NCLAT).
Updating the progress of resolution, the IL&FS board led by Uday Kotak said that the debt of Rs 55,000 crore will be resolved through asset monetization, restructuring and insolvency proceedings initiatives.
Some of this has already been completed, while the rest are in various stages of resolution, it said in a brief snapshot on the progress made in the ongoing resolution process till December 7, 2021, and suggested progress projections by March 2022.
As on October 8, 2018, IL&FS had a total outstanding debt of Rs 99,355 crore, of which Rs 45,500 crore is handled through debt resolution initiatives by March 2022.
Out of this, Rs 20,500 crore is to be released through debt monetization, Rs 4,000 crore through debt redemption and Rs 21,350 crore through cash available companies and Invitational Unit (Infrastructure Investment Trust).
In addition, the board is also expected to settle Rs 5,300 crore through “closure of transactions approved and pending by the concerned court/ tribunal” and Rs 4,200 crore from resolution applications filed with courts and pending approvals.
“As on January 4, 2021, the total number of entities in the Respondent No. 1 (IL&FS) group has come down from 302 to 111,” the affidavit said. In this, domestic entities of IL&FS have been reduced from 169 to 95, while that of offshore entities have been reduced from 133 to 16.
The board had reported 29 out of 60 entities to be resolved through the entity monetization process; 12 street properties under invitation; 3 assets where the concession was terminated and 30 units where it initiated closure or insolvency proceedings.
“An important focus of the new Board has been on maintaining the concern position of the Respondent No. 1 Group. The Respondent No. I Group is also focusing on several resolution initiatives, including the loans granted/done by the Respondent No. I Group. and expediting the recovery of investments, which will be used for discharging the claims of the creditors of the relevant Respondent No. I Group entities. As per the Revised Distribution Framework approved by this Tribunal (NCLAT) vide its judgment dated March 12, 2020, stated in the affidavit.
This has also resulted in an accumulated cash balance of Rs 16,742 crore as on December 7, 2021. The NCLAT had on March 12, 2020 approved a distribution structure based on “proportionate distribution” among the debt-ridden IL&FS Group’s creditors. The sale proceeds, as suggested by the government. In September 2021, the government extended Uday Kotak’s tenure as chairman of IL&FS by six months.
Kotak, the managing director and CEO of Kotak Mahindra Bank, was appointed by the government to help the troubled IL&FS out of its crisis. As per the roadmap of IL&FS, its group companies have been classified into three categories – Green, Amber and Red, on the basis of their respective financial position.
Those companies under the green category will continue to meet their payment obligations. The Amber category is for companies that will not be able to meet their obligations but can only meet operational payment obligations to senior secured financial creditors. The Amber category of entities are “permitted to make only necessary payments to maintain and protect the ongoing concern”.
According to the plan, “companies in the red category are entities that cannot meet their payment obligations to senior secured financial creditors.”
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