IL&FS group announces Rs 5,000-crore payout in InvIT units and cash

IL&FS Group announces Rs 5,000-crore payout in InvIT units and cash

The IL&FS group has initiated an interim distribution of Rs 5,000 crore to eligible creditors as part of its ongoing debt resolution process.

According to a release dated February 17, this includes Rs 3,500 crore in Infrastructure Investment Trust (InvIT) units and Rs 1,500 crore in cash.

Following this payout, the total debt discharged by the group will reach approximately Rs 43,000 crore, accounting for over 70 percent of its Rs 61,000 crore debt resolution target, the release said.

The payout is being executed through IL&FS Limited, IL&FS Financial Services Limited (IFIN), and IL&FS Transportation Networks Limited (ITNL), which collectively hold the majority of the group’s debt.

The InvIT units have been issued by Roadstar Infra Investment Trust, which comprises six road assets including the Moradabad Bareilly Expressway Limited (MBEL), Sikar Bikaner Highway Limited (SBHL), Pune Sholapur Road Development Company Limited (PSRDCL), Barwa Adda Expressway Limited (BAEL), Thiruvananthapuram Road Development Company Limited (TRDCL), and Hazaribagh Ranchi Expressway Limited (HREL).

The total enterprise valuation of these assets stands at Rs 8,576 crore.

This move is expected to significantly improve recoveries for creditors of these six Special Purpose Vehicles (SPVs), including IL&FS Limited, IFIN, ITNL, and Sabarmati Capital One Ltd (SCOL), which had extended loans to these entities, the release said.

The InvIT units are being distributed via a private placement followed by listing, as per SEBI regulations.

“The payout marks an important milestone for the group as it resolves six major road assets through the InvIT route,” said Nand Kishore, Chairman and Managing Director of the IL&FS group.

“The public interest board remains committed to achieving the Rs 61,000 crore debt resolution target.”

The IL&FS Board has set February 17, 2025, as the record date for the allocation of InvIT units and cash distribution.

The interim distribution will benefit several banks and financial institutions, including Bank of Baroda, Canara Bank, SBI, ICICI Bank, DBS, LIC Mutual Fund, and IndusInd Bank.

Additionally, numerous public funds, such as the Post Office Life Insurance Fund, NPS Trust, LIC P&G Fund, SBI Employee Provident & Pension Funds, Infosys EPF Trust, Army Group Insurance Fund, and the Coal Mines Provident Fund, will receive cash or InvIT units as part of the payout, the release said.

The IL&FS Board opted for the InvIT model in 2019 after individual road asset monetisation efforts failed to yield favourable results.

The decision was aimed at ensuring better valuations for creditors. Following regulatory approvals, Roadstar Infra Investment Trust was established, with Roadstar Investment Managers Limited as its investment manager and Elsamex Maintenance Services Limited as the project manager. The six road assets were subsequently transferred to the InvIT.

The National Company Law Appellate Tribunal (NCLAT) approved the interim distribution framework in May 2022 based on the recommendation of the new IL&FS Board.

The framework was designed to facilitate the timely release of funds to creditors, particularly public funds, pending the final resolution of IL&FS Group entities, the release added