IFIN recovers Rs 1,379 cr loan, gross NPA at 97 pc

Post the recovery, IFIN has a cash balance of Rs 1,450 crore which includes and its gross non-performing asset (NPA) by the end of November standing at 97 per cent, according to a recent affidavit filed by the Ministry Corporate Affairs (MCA) at the the National Company Law Appellate Tribunal (NCLAT).

The MCA has submitted the fresh affidavit in the company law tribunal representing the new IL&FS Board which took over the group in 2018.

Out of the total recovery, around Rs 1,309.9 crore came from around 30 third party borrowers, it said.

"IFIN has been able to recover monies aggregating to Rs 13.1 billion from third party borrowers comprising recovery of Rs 10.5 billion under the credit exposure (including interest) and Rs 2.6  billion under the investment exposure," the affidavit said.

"The cash balance as on November 30, 2019 stood at Rs 14.5 billion (including other income and net of operating expenses) vis a vis opening balance of Rs 2.37 billion."

Further, it also mentioned that IFIN has entered into resolution with five third party borrowers wherein the entire principal outstanding of Rs 6,100 crore would be repaid along with the applicable interest. Of the Rs 6,100 crore an amount of Rs 1,300 crore  towards principal along with applicable interest has been recovered as on November 30, 2019 and an amount to Rs 4,800 crore along with applicable interest is expected to be recovered in future, it said.

The principal amount owed by third party borrowers to IFIN as of October 1, 2018 stood at Rs 8,356 crore.

As of November-end, IFIN initiated a total of 117 recovery actions against third party borrowers including 49 complaints and petitions against 14 parties under Section 138 of the Negotiable Instruments Act, 1881 and 27 recovery suits against 15 borrowers, among others.

In the revised affidavit, the Corporate Affairs Ministry has also urged the NCLAT to approve the revised formula for sharing resolution proceeds from the disposal of bankrupt IL&FS group firms among its creditors in a fair and equitable manner.

The revised mechanism would provide for the distribution of residual proceeds over and above liquidation value of assets to other than secured creditors.

The IL&FS Group and its subsidiary companies, which have about Rs 91,000 crore in debt, is in the bankruptcy court following its defaults in 2018 that shook the entire financial sector of the country and triggered the NBFC liquidity crisis.

During the period July 2018 to September 2018, two of its subsidiaries reported having trouble in paying back loans and inter-corporate deposits to lenders. This was followed by multiple subsidiaries defaulting and the group heading to bankruptcy.

In its 32nd Annual General Meeting (AGM) on December 31, Uday Kotak, the Chairman of the restructured IL&FS Board had said that the ongoing resolution process of the debt-ridden group is a "test case" for group-wide resolution of stressed assets in the country adding that the board expects to recover 50 per cent of the overall outstanding debt in its books as on September 30, 2018.