Despite pandemic IL and FS expects to address over Rs 50K cr debt in FY21

It is hopeful of achieving the targeted debt resolution of over 50 per cent of the overall debt.

In a statement on Saturday, IL&FS said that the aggregate value of debt being addressed is pegged at Rs 56,300 crore, with over Rs 50,000 crore likely to be addressed by March 2021.

In July, the company had said it expects to address debt of about Rs 57,240 crore, with around Rs 50,500 crore likely to be addressed by March 2021.

The overall debt of the group stood at over Rs 99,000 crore as of October 2018.

As per the last update shared in July 2020, the overall debt addressed based on cash balances stood at Rs 17,640 crore.

By September 2020, an additional debt of approx. Rs 1,460 crore has been addressed, by way of sale of Education business, recovery from non-IL&FS group entities, increase in cash balances and debt repayment in Green entities, increasing the overall debt addressed based on cash balances to Rs 19,100 crore, it said.

The number of entities resolved as of September 2020 stands at 173, half the original number of 347 entities of the IL&FS Group.

Elsamex S.A., an IL&FS Group company with 100 step down subsidiaries, was admitted into insolvency during the September 2020 quarter, thus contributing to the substantial reduction in the number of entities of the IL&FS Group.

As compared to the previous update, the Rs 7,300 crore shortfall in target for debt addressed by September 2020 is being rolled over for achievement in subsequent quarters, the company said.

"The delay has been mainly caused on account of significant impact of Covid-19, which has added time and logistical complexities in the process of completing discussions with stakeholders and in obtaining approvals from lenders, regulators and judicial authorities," it said.

As per the revised estimates, Rs 13,200 crore of additional debt is projected to be addressed by December 2020. This includes Rs 8,150 crore resolved through the proposed InvIT for which an 'in-principle' approval from SEBI has been received.

Further, resolution of Rs 4,200 crore being achieved through debt restructuring has moved from September 2020 to December 2020. Resolution for Rs 10,000 crore, earlier communicated for achievement in Q3 FY21, is being moved to be achieved in subsequent periods.

The New Board of IL&FS has developed a unique "Group resolution framework" that received approval from NCLAT on March 12, 2020. The framework has the potential to form a benchmark for future group insolvencies in the country.

The IL&FS New Board has been following a three-pronged strategy -- Resolve, Restructure and Recover -- while adopting an approach of equitable distribution and balancing interests of stakeholders across the IL&FS Group under the IBC and Corporate Finance principles, to resolve the debt of the Group, the statement said.