The crisis-hit Infrastructure Leasing and Finance Limited (IL&FS) group says so far it has addressed a debt of about Rs43,000 crore and increased its aggregate debt recovery estimate by Rs5,000 crore to Rs61,000 crore due to improved valuations, better operating performance and enhanced recoveries from non-group exposure.
Speaking with media persons at a web-meeting, Uday Kotak, chairman of IL&FS, says, "The increased estimate represents a resolution of nearly 62% of overall fund based and non-fund-based group debt of around Rs99,000 crore as of October 2018."
"The aggregate debt of Rs43,000 crore addressed till date represents nearly 71% of the overall revised targeted recovery value of Rs61,000 crore and 44% of the overall debt of over Rs99,000 crore," Mr Kotak says.
According to IL&FS, the recovery target is higher than the average recovery observed under the Insolvency and Bankruptcy Code (IBC) since its inception. It says, "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 new board, Mr Kotak says, while working in the public interest, 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.
"The upgrade in potentially addressable debt by Rs5,000 crore has been largely due to improved valuations, better operating performance and enhanced recoveries from non-group exposures," he says.
IL&FS says, the aggregate addressed debt of Rs43,000 crore comprises Rs26,800 crore based on entity monetisation initiatives and accrued cash balance, Rs14,350 crore of additional net recovery expected from resolution and restructuring applications filed with and awaiting approval of the Mumbai-bench of National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) and Rs1,926 crore from the Supreme Court verdict passed in favour of Rapid Metro Gurgaon.
During 2021, the group filed NCLT application for Phase 1 of IL&FS's Infrastructure Investment Trust (InvIT) with a resolution value of over Rs9,300 crore across six special purpose vehicles (SPVs) from the road sector.
Encompassing 12 road SPVs, the InvIT, which is being set up across multiple phases represents one of India's largest such resolution initiatives and would contribute to significant value enhancement for IL&FS group stakeholders, it says.
The gross resolution value across all completed NCLT and NCLAT filings but awaiting final approval amounts to over Rs20,450 crore.
Over the next few quarters, CS Rajan, managing director (MD) of IL&FS says the group estimates to address around Rs8,000 crore of additional debt. By September 2021 that would include monetisation of stake in ONGC Tripura, Warora Chandrapur and Karyavattom Stadium, phase-2 of InvIT including five road SPVs, and receipt of expected settlement claims from road authorities for Khed Sinnar Expressway and Srinagar Sonmarg Tunnel.
With this, the overall debt addressed is expected to cross Rs51,000 crore by September 2021, he added.
Further, IL&FS sees recovery of around Rs10,000 crore to spill over beyond September 2021 due to 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 at Bandra Kurla Complex (BKC) in Mumbai, expected receipt of settlement claims for balance road assets, among others, it added.