IL and FS addresses Rs 43,000 cr debt, raises aggregate debt recovery target

The previous estimate of overall debt recovery was Rs 56,000 crore. 

The increased estimate represents a resolution of nearly 62 per cent of overall fund based and non-fund based group debt of around Rs 99,000 crore, as of October 2018, Chairman of IL&FS, Uday  Kotak told the media on Thursday. 

The aggregate debt of Rs 43,000 crore addressed till date represents nearly 71 per cent of the overall revised targeted recovery value of Rs 61,000 crore and 44 per cent of the overall debt of over Rs 99,000 crore. 

"It may be kept in mind that the recovery target is higher than the average recovery observed under IBC since its inception," said an IL&FS statement. 

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, while working in 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 Rs 5,000 crore has been largely on account of improved valuations, better operating performance and enhanced recoveries from non-group exposures," IL&FS said. 

The aggregate addressed debt of Rs 43,000 crore comprises Rs 26,800 crore on the basis of entity monetisation initiatives and accrued cash balance, Rs 14,350 crore of additional net recovery expected from resolution and restructuring applications filed with and awaiting approval of the Mumbai-bench of NCLT and the NCLAT and Rs 1,926 crore from Supreme Court verdict passed in favour of Rapid Metro Gurgaon. 

The period since January 2021 also saw the filing of NCLT application for Phase 1 of IL&FS Group's Infrastructure Investment Trust (InvIT) with a resolution value of over Rs 9,300 crore across six Road SPVs. 

The InvIT, which is being set-up across multiple phases (encompassing 12 Road SPVs) represents one of India's largest such resolution initiatives and would contribute to significant value enhancement for IL&FS Group stakeholders, it said. 

The gross resolution value across all completed NCLT and NCLAT filings but awaiting final approval amounts to over Rs 20,450 crore. 

In the next few quarters, IL&FS estimates to address around Rs 8,000 crore of additional debt by September 2021 which 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 Rs 51,000 crore by September 2021. 

Further, recovery of around Rs 10,000 crore is likely to spill over beyond September 2021 on account of 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 in BKC, Mumbai, expected receipt of settlement claims for balance road assets, among others.