IL&FS: Uday Kotak's Term Ends; CS Rajan To Takeover as CMD
Moneylife Digital Team 29 March 2022
The term of Uday Kotak, who was appointed as chairman of crisis-hit Infrastructure Leasing and Finance Ltd (IL&FS) is ending this week and the Union government has appointed CS Rajan, who is managing director (MD), as the new chairman for six months. Last year in September, the Union government extended by six months, the term of Mr Kotak as chairman of IL&FS to maintain continuity in the resolution plan being worked out for the indebted group. Mr Kotak is MD and chief executive officer (CEO) of Kotak Mahindra Bank.  
 
Speaking with media in Mumbai, Mr Kotak says, the IL&FS group has addressed a debt of about Rs55,000 crore, or 90% if its original estimate of Rs61,000 crore. The group also maintained its earlier estimate of resolving debt of Rs61,000 crore, representing a resolution of 62% of the overall—fund-based and non-fund based—debt of over Rs99,000 crore as of October 2018. 
 
In a release, IL&FS says, resolution of the remaining Rs6,000 crore debt will move into FY22-23. "Of the 347 entities under IL&FS Group as of October 2018, a total of 246 entities stand resolved leaving 101 entities to be resolved in the next financial year."
 
"An application has been filed with the National Company Law Appellate Tribunal (NCLAT) for undertaking interim distribution of Rs16,000 crore of cash and InvIT units available across the group. Over 75% of this would be distributed to creditors of three large holding companies - IL&FS, IL&FS Financial Services (IFIN) and IL&FS Transportation Networks (ITNL) - which have a large base of public fund creditors. This has been made possible on account of IL&FS' resolution framework and the underlying distribution formula," it added.
 
IL&FS has also sold its headquarter located in Bandra Kurla Complex (BKC) in Mumbai to Brookfield for Rs1,080 crore. It has given the letter of intent and the assets will be handed over to Brookfield in 2022.
 
 
It says, "The incremental resolution of over Rs2,700 crore since November 2021 comprises of Rs1,080 crore from sale of IL&FS headquarters (TIFC) in BKC, Mumbai, Rs900 crore under Khed Sinnar claim settlement with NHAI, Rs230 crore from the settlement of IFIN's non-performing loan (NPL) accounts and Rs520 crore from other recoveries. In addition, the group continues to service debt of Rs1,000 crore across companies."
 
"ITNL completed the transfer of two road assets, Sikar Bikaner Highway Ltd and Moradabad Bareilly Expressway Ltd to Roadstar Infra Investment Trust at a cumulative enterprise valuation of Rs 4,200 crore. Transfer of remaining special purpose vehicles (SPVs) to the IL&FS's Infrastructure Investment Trust (InvIT) is being undertaken in multiple phases," it added.
 
According to Mr Kotak, the new board continues to encounter several challenges in completing the resolution which, in turn, have impacted timelines. "Some of these are existence of complex share-holding arrangements and web of infra group borrowings, non-payment of dues by state utility to IL&FS Tamil Nadu Power Company Ltd (ITPCL), delay in receipt of annuities from some state governments, securing various consent from other stakeholders including lenders, shareholders and joint venture partners, coercive creditor actions, and ongoing legal proceedings by different lender groups, sub-contractors and authorities," he says.
Comments
bucolic.pvtltd
3 months ago
Sir, When Finalized the small payment of IIDC LIMITED
(IL&FS INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED)
r_ashok41
3 months ago
looks like our financial system has got lot of loopholes which is the reason organsations with people like the above use it to their convenience.Unless these loopholes are all removed and punishment is severe it should deter people from resorting to such kind of tactics also shell companies.A law with serious consequencies should be there to ensure that people do good business and not siphon out the money and put small investors into a quandary
smaran1999
3 months ago
It is a phenomenal performance under Uday Kotak that such a Herculean task of cleaning up a huge pile of mess/fraud by erstwhile management team @ ILFS and that he ensured in a span of just about 3 years major resolutions which involved many legal tangles and negotiations and discussions and stern decisions- required a lot of abundantly super skill sets which we people could see rest in Uday Kotak. He has set the ball rolling in right direction for the next MD/CEO RS Rajan to take it forward to see the logical finality. A right choice by GoI in 2018. May be, a compendium by way of a book, of all such learnings from resolving such frauds should be published with details of how such frauds took place etc for future generation to learn lessons and proper monitoring by boards of such entities
saharaaj
3 months ago
Back to good old days for IAS tribe
saharaaj
3 months ago
The article white washes and mil washes Il FS incoming seems tobe memeberof tribe which evacuated GSE ( Govt Sponsored Enterprise )
Ramesh Popat
3 months ago
well done uday !
r_ashok41
3 months ago
hope something good happens for the small investors
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