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This company must repay debts worth Rs 99,000 crore - there's a plan to do it

Chitranjan Kumar     July 20, 2020

Crisis-hit Infrastructure Leasing and Financial Services (IL&FS) Group on Monday said it expects to address over Rs 50,500 crore of debt by the end of the financial year 2021. This amounts to 48.98 per cent of the estimated overall debt of over Rs 99,000 crore.

IL&FS Group's new board, headed by veteran banker Uday Kotak, expects the company to address over Rs 57,000 crore of debt, with around Rs 50,500 crore likely to be addressed by March 2021, the debt-ridden company said in a regulatory filing.

"The revised value accounts for over 57 per cent of overall debt and is significantly higher than the average realisation, till date, for Financial Creditors under theI BC process," IL&FS said in a filing to the Bombay Stock Exchange.

Till June 30, 2020, IL&FS has addressed debt of Rs 17,640 crore, including cash balance of Rs 8,630 crore, from a combination of - completed asset sales, debt repayment to Green Entities, debt discharged in Non-Green entities and available cash balance across the group.

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Sharing a quarterly plan, the group's non-executive chairman Uday Kotak-led board said it will address additional debt of Rs 8,800 crore by Q2 FY21 (September quarter); Rs 18,000 crore by Q3 FY21 and over Rs 6,000 crore by the end of Q4FY21 -aggregating to Rs 50,500 crore by end of FY21.

Efforts towards resolution of additional debt of Rs 6,600 crore are likely to continue beyond FY21, as the new board expects the resolution of major holding companies to take a longer time, the company said.

The IL&FS board has developed a "group resolution framework" that received NCLAT approval on March 12, 2020. As part of the resolution efforts, IL&FS also proposes to set up one of the country's largest InvITs with a target gross value of Rs 13,000 crore. It includes three special purpose vehicles (SPVs) where debt of Rs 5,000 crore has been restructured.

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The group is in an advanced stage of concluding the sale process of 15 entities with resolution of nearly Rs 8,500 crore and plans restructuring additional debt of Rs 4,900 crore.

The government had, in October 2018, seized control of the debt-strapped group and superseded its board with one led by Uday Kotak. The new board has till date met 42 times since October 2018 to ensure governance and vigorous oversight of the resolution process. During this period, total number of entities has been reduced from 347 to 276, which is expected to further reduce to around 60 entities by March 2021.

Besides, the board has taken multiple steps and ensured preservation of key national road and power assets, it said.

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