IL&FS Discharges Debt Worth Rs38,082 Crore to Creditors; Overall Debt Resolution Reaches 61.4%
Moneylife Digital Team 06 November 2024
The crisis-hit Infrastructure Leasing and Finance Ltd (IL&FS) group discharged a debt of Rs38,082 crore to creditors on 30 September 2024. Due to various measures taken by the new board, IL&FS says its overall debt resolution across the group is estimated to reach 61.39% or Rs61,000 crore of its total external debt outstanding of Rs99,355 crore. 
 
IL&FS has filed an affidavit before the national company law appellate tribunal (NCLAT) sharing the status update and progress made in the resolution process of the group entities.  
 
Last year, NCLAT permitted interim distribution for all IL&FS group entities. Subsequently, as on 30 September 2024, the interim distribution for Rapid Metro Rail Gurgaon Ltd (RMGL) for Rs636 crore, Rapid Metro Rail Gurgaon South Ltd (RMGSL) for Rs1,273 crore, IL&FS Financial Services Ltd (IFIN) for Rs4,007 crore (phase 1 + phase 2 distributions), Chenani Nashri Tunnelway Ltd (CNTL) for Rs920 crore, IL&FS Maritime Infrastructure Company Ltd (IMICL) for Rs160 crore, IL&FS Energy Development Company Ltd (IEDCL) for Rs874 crore (phase 1 + phase 2 distributions), IL&FS Wind Energy Ltd (IWEL) for Rs650 crore, MP Border Checkpost Development Company Ltd (MPBCDCL) for Rs415 crore (phase 1 + phase 2 distributions), IL&FS Transportation Networks Ltd (ITNL) for Rs796 crore and IL&FS for an amount of Rs810 crore had been successfully completed, after following the procedure approved by NCLAT.
 
Accordingly, IL&FS says, as of 30 September 2024, the total debt discharged by way of interim distribution aggregated to Rs11,045 crore, out of which Rs9,653 crore has been discharged to external financial creditors.
 
Further, the IL&FS group has cash balances worth Rs10,873 crore, of which cash available for interim or final distribution is Rs1,913 crore. Cash held for going concern expenses, contingent and external routed claims is Rs1,395 crore and the balance cash of Rs7,566 crore is available in entities undergoing resolution, it added.
 
IL&FS was declared insolvent in September 2018 after it failed to honour its debt distributed among its 347 group companies. The complex nature of IL&FS and the risk it posed to the financial system led to some new regulations. One among the regulations was the Reserve Bank of India (RBI) putting a cap on two core investment companies (CICs) within a corporate group. 
 
Earlier in July, in a likely first-of-its-kind move on the orders of the Union ministry of corporate affairs (MCA), IL&FS sought to recover Rs250 crore from its employee welfare trust (EWT) beneficiaries, mainly former directors of IFIN and ITNL. 
 
A 2018 submission by MCA before the national company law tribunal (NCLT) revealed that top executives of IL&FS, including Ravi Parthasarathy, Hari Sankaran and Arun Kumar Saha, misused EWT and "the trust deed was instituted fraudulently with criminal intention to gain unlawful benefits." 
 
The submission also exposes how the EWT was mainly used to enrich a few select employees. 
 
According to the serious fraud investigation office (SFIO), the IL&FS EWT was used as a conduit to give shape to fraudulent motives of the key managerial persons of IL&FS."...the financial statements for the past eight years indicate that less than 1% of the total expenditure was made towards welfare of employees and the remaining was diverted towards enriching few selective employees," it says. (Read: IL&FS Asks 200 Beneficiaries of Employee Welfare Trust To Refund Rs250 Crore: Report)
 
Comments
r_ashok41
8 months ago
When are we going to get the money is what all of us are looking at and hope to start with we get some money
Meenal Mamdani
8 months ago
This is all thanks to Uday Kotak who took charge of the failed company. In other cases when the bankruptcy resolution person has been inept or corrupt, people have recovered minuscule amounts. Too bad that the chief architect of this robbery, Ravi Parthasarathy, was not put in prison before he died.
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