IL&FS pays Rs 28,848 cr debt by FY23, maintains overall debt resolution target at Rs 61,000 cr

Crisis-hit infrastructure finance company IL&FS has paid debts totaling Rs. 28,848 crore as of March 31, 2023, according to the latest affidavit filed with the NCLAT Insolvency Appeal Tribunal earlier this week.

The Group settled the debt through monetization and termination/settlement of payments by the Group entities from the concession authorities and the counterparty in the relevant contract.

“As of March 31, 2023, the debt resolved through these monetization and termination proceedings has amounted to Rs 17,894 crore,” said the case update report filed before the National Companies Law Appeal Tribunal (NCLAT) by the company.

Besides, it has emptied Rs 4,958 crore by eliminating non-fund based limits provided by group entities and Rs 5,996 crore through temporary distribution.

By the end of FY23, “total debts forgiven to creditors of Group 1 Respondent (IL&FS) amount to Rs. 28,848 crore,” according to the affidavit.

Further, cash balances across IL&FS Group are at Rs. 14,994 crore, of which cash available for interim/final distribution is Rs. 4,451 crore and balance Rs. 10,543 crore available in entities which are subject to dissolution.

The InvIT units owned by certain entities of IL&FS Group are worth Rs.2,546 crore.

Further, decisions totaling Rs 6,634 crore were pending for closure before the benches of the Court of Appeal of the National Companies Act.

“The value of the decision in respect of the Group No. 1 entities of the respondent (where the application has been approved/enrolled in the register by the NCLT, but in case of closure is not yet done), totals to Rs 6,634 crore (actually net of cash and debt)” until March 31, 2023,” the report dated April 30 reads.

According to the framework approved by the Court of Appeal, approval from the NCLT is required for the settlement mechanism of the relevant local group entities.

IL&FS has maintained the overall debt settlement target of Rs.61,000 crore.

“The new Board of Directors has been tasked with dissolving the No. 1 Respondent Group, and based on the various measures it has taken, the total resolution of debt across the No. 1 Respondent Group is estimated to be around Rs. 61,000 crore, which is a total of approximately 61.39 per cent of the total external debt. List of Rs 99,355 crore”.

It has already completed provisional distribution of Rs 635 crore and Rs 1,273 crore in two Special Purpose Vehicles (SPVs) – Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited (RMGSL) – as termination payment in Gurgaon Metro project case.

Besides, it has also completed interim distribution of Rs 3,200 crore to IFIN creditors, as per revised distribution framework approved by NCLAT and Rs 920 crore to Chenani Nashri Tunnelway (CNTL) creditors.

According to IL&FS’s roadmap, its group companies have been categorized into three categories – green, amber and red – based on their respective financial status.

Companies that fall under the green category are those that continue to meet their payment obligations.

The Amber category is for those companies that will not be solvent but can only meet operational payment obligations to senior secured financial creditors.

Amber class entities are “allowed to make only payments necessary to maintain and sustain the continuity of the project”.

“Companies that fall into the red category are entities that are unable to meet their payment obligations to senior secured financial creditors,” according to the plan.

IL&FS has a total of 302 entities of which 169 are domestic and the remaining 133 are overseas. In this, 47 domestic entities and 115 external entities are completely dissolved.

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