IL&FS repays Rs 35,650 cr to lenders, works on debt resolution for Rs 22,000 cr more

IL&FS has a repayment target of Rs 61000 crores to creditors

Debt-ridden IL&FS on October 3 said it has repaid Rs 35,650 crore of debt till September 30 to its lenders and other creditors across the group companies, marking another step towards full resolution of the debt crisis that had grounded the non-banking finance company (NBFC).

The resolution process to repay another Rs 20,000-22,000 crore is underway, a company official said. As per the resolution plan, the newly set up IL&FS board had committed to repay Rs 61,000 crore in debt to its lenders. The company's total debt load weighed at Rs 99,000 crore at the end October 2018 when it collapsed because of a deepening a debt crisis.

The Rs 35,650-crore debt repayment is by way of monetisation of assets, auto debits by banks and debt repayment (including interim distribution) across entities as of September 30, 2023, the company said in a press release.

Also, the group has completed an aggregate payment of approximately Rs 10,000 crore by way of interim distribution across 14 companies, including two vertical holding companies and the group holding company, the company added.

“We are happy to have achieved Rs 10,000 crore pay-out under the interim distribution framework that was proposed by the new board and approved by NCLAT last year,” said Nand Kishore, Managing Director, IL&FS Group.

“This allowed us to pay dues to eligible creditors, including several public funds and debenture holders, that are invested at the vertical holding companies and group holding company, on interim basis, without waiting for final resolution,” Kishore said.

IL&FS initiated pay-outs to eligible creditors under the interim distribution framework in three companies – IL&FS Limited, IFIN and ITNL - totalling to over Rs 2,400 crore in September 2023.

This amount being paid to creditors is in addition to nearly Rs 7,600 crore already disbursed across 12 group companies under the approved interim distribution framework in last one year.

IL&FS, which defaulted on its loan repayment for the first time in September 2018, had to pay back its lenders over Rs 90,000 crore at that time. In its earlier affidavit filed by the new board then headed by Uday Kotak, IL&FS group had said it will resolve Rs 55,000 crore debt by March 2022.

The new board of IL&FS initiated various measures to pare debts, which included asset monetisation, debt restructuring, cost optimisation and liquidity management.

It also focused on multiple resolution initiatives, including expediting loan recoveries and investment by IL&FS group companies. The amount will be utilised towards discharging claims of creditors in accordance with the revised distribution framework.

In September 2021, the government extended Uday Kotak's term as the IL&FS chairman by six months, which ended on April 2, 2022. Later, CS Rajan was made the non-executive chairman of IL&FS. As per the roadmap for IL&FS, its group companies have been categorised into three categories - green, amber and red - based on their respective financial positions.

Companies under the green category are those that continue to meet their payment obligations. Amber category is for those companies that would not be able to meet their obligations but can meet only operational payment obligations to senior secured financial creditors. Amber category entities "are permitted to make only payments necessary to maintain and preserve the going concern".