IL&FS resolves Rs 55,000 crore debt till March-end, CS Rajan to take over as CMD from April 3

Since its last update in November, the company led by veteran banker Uday Kotak has resolved incremental debt amounting to Rs 2,700 crore.

The Union Government has appointed CS Rajan as Chairman and Managing Director of Infrastructure Leasing & Financial Services (IL&FS) for a period of six months with effect from April 3, the company announced in a press conference on March 29. Till March-end, the infra behemoth has been able to resolve debt amounting to Rs 55,000 crore.

Of the total debt of Rs 55,000 crore, Rs 21,000 crore of debt has been discharged by way of monetisation of assets and debt repayment, largely to public sector lenders. The group has another Rs 20,000 crore in the form of cash and INVIT unit balance, while debt amounting to Rs 14,000 crore is presently engaged in different courts of which Rs 7,500 crore has already been approved and transaction closure is underway.

The resolved debt amounts to 90% of the total debt that was expected to be resolved, Rajan told reporters. Since its last update in November, the company has resolved incremental debt amounting to Rs 2,700 crore.

The incremental resolution of over Rs 2,700 crore comprises Rs 1,080 crore from the sale of IL&FS headquarters in BKC Mumbai, Rs 900 crore under Khed Sinnar claim settlement with NHAI, Rs 230 crore from the settlement of IFIN’s non-performing loan accounts, and Rs 520 crore from other recoveries. In addition, the Group continues to service debt of Rs 1,000 crore across companies.

Further, the management today exhumed confidence in achieving the target of resolving Rs 61,000 of debt.

Kotak, who has been leading the debt resolution process of IL&FS since the behemoth defaulted on loan repayment in 2018, said it would be a matter of great joy if the Group succeeds in surpassing the Rs 61,000 crore debt resolution target, chances of which are very likely as per him.

The management today also pointed out the pain points in the resolution process saying they encounter several challenges in completing the resolution, which in turn, have impacted timelines.

“Some of these are the existence of complex share-holding arrangements and web of infra group borrowings, non-payment of dues by state utility to ITPCL, delay in receipt of annuities from some State Governments, securing various consent from other stakeholders including lenders, shareholders and joint venture partners, coercive creditor actions, and ongoing legal proceedings by different lender groups, sub-contractors and authorities,” it said.