IL&FS ups debt resolution target to Rs 61,000 crore, says Rs 43,100 crore of debt already addressed

Crisis-ridden Infrastructure Leasing & Financial Services Limited (IL&FS) on Thursday said it has upped the debt resolution target by about Rs 5,000 crore to Rs 61,000 crore. This would form nearly 62 percent of the group's total fund and non-fund based debt of about Rs 99,000 crore.

The new government-appointed board of the company led by veteran banker Uday Kotak had earlier estimated overall debt recovery of Rs 56,000 crore. "Improved valuations, better operating performance, enhanced recoveries from non-group exposure," were the major drivers behind the revised outlook, the company said in a statement.

Its chairman Uday Kotak said nearly Rs 43,100 crore of debt stands addressed as of today, including filings made with NCLT/NCLAT and final orders of Supreme Court awaiting compliance. He added that of the 347 group entities, 186 now stand resolved, and the resolution for the remaining is underway.

IL&FS sells environmental business to Everstone arm, to pare Rs 1,200 crore debt

"The aggregate debt of Rs 43,000 crore addressed till date represents nearly 71 percent of the overall revised targeted recovery value of Rs 61,000 crore and 44 percent 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," IL&FS said.

Key initiatives that were completed in the period since January 2021 include: Sale of Chongqing Yuhe Expressway, Sale of environment business; Receipt of settlement claims from NHAI for three road projects (Kiratpur Ner Chowk, Fagne Songadh and Chenani Nashri Tunnel); Receipt of proceeds under IBC resolution of Dighi Port; Operating income received in operating road concessions and through sale of power at ITPCL.

According to IL&FS, the period since January 2021 also saw the filing of NCLT application for Phase 1 of IL&FS Group's Infrastructure Investment Trust (InvIT) with a resolution value of over Rs 9,300 crore across six road SPVs. The InvIT, which is being set-up across multiple phases (encompassing 12 road SPVs) represents one of India's largest such resolution initiatives and would contribute to significant value enhancement for IL&FS Group stakeholders. The gross resolution value across all completed NCLT / NCLAT filings but awaiting final approval amounts to over Rs 20,450 crore, the company said.

Also read: IL&FS receives Rs 693 cr settlement claims for 2 road projects from NHAI

"In the next few quarters, IL&FS estimates to address approximately Rs 8,000 crore of additional debt by September 2021 which would include: monetisation of stake in ONGC Tripura, Warora Chandrapur and Karyavattom Stadium; Phase 2 of InvIT including 5 road SPVs; and receipt of expected settlement claims from road authorities for Khed Sinnar Expressway and Srinagar Sonmarg Tunnel. Thus, the overall debt addressed is expected to cross Rs 51,000 crore by September 2021," its statement read.

Further, recovery of approximately Rs 10,000 crore is likely to spill over beyond September 2021 on account of various reasons, including procedural complexities. This includes sale of Paradip Refinery, Mangalore SEZ, Tamil Nadu Water, ILFS Prime Terminals Fujairah, Hill County Properties; Phase 3 of InvIT; Sale of real estate assets including IL&FS Building in BKC, Mumbai, expected receipt of settlement claims for balance Road assets; among others, IL&FS said in its statement.

Referring to the complex process of resolving the large company's debt, its chairman Uday Kotak told CNBC-TV18 that it was like "unpeeling an onion," and that the new board and management's job was to "keep moving forward."

• Rs 2,750+ crore – Sale of Chongqing Yuhe Expressway and Environment Entities completed.

• Rs 1,400+ crore – Settlements / Claims received in 3 Roads (Kiratpur Nerchowk Expressway, Fagne Songadh Expressway, Chenani Nashri Tunnel)

• Rs 850+ crore – Operating cash-inflow from Annuity / Toll income in Roads, Sale of power etc.

• Rs 150+ crore – Received from Dighi port IBC proceeds, sale of real estate in Makers/Constantia

• Rs 8,250+ crore – InvIT Phase I for 6 Road SPVs (Total resolution value of Rs 9,300 crore)

• Rs 2,550+ crore – Sale of Chenani Nashri Tunnel & Jorabat Shillong Expressway (Total resolution value of Rs 5,050 crore).

• Rs 2,650+ crore – Debt restructuring of ITPCL (Total resolution value of Rs 4,900 crore).

• Rs 900 crore - Sale of Technology group (5 entities) (Total resolution value of Rs 1,200 crore)​.