IL&FS board submits progress report on group's asset monetisation process

The Infrastructure Leasing & Financial Services (IL&FS) board submitted its fifth progress report, underlining the steps being taken to pare the group’s debt and the status of the asset monetisation process.

The report was shared with the National Company Law Tribunal on Tuesday and the appellate tribunal on Wednesday. The report says so far, 55 of the 169 entities are classified as green, which means they can meet their debt obligations.

Thirteen are classified as amber entities, which can only meet operational payment obligations and 82 are classified as red entities, unable to meet any debt obligation. Eleven entities have still not been classified into any category and have a debt of Rs 5,895 crore and eight are undergoing winding up process. 

As far as the asset monetisation process is concerned, the IL&FS board has received 18 expressions of interest (EoIs) for IL&FS Tamil Nadu Power Company, Porto Novo Maritime, and IL&FS Maritime Offshore. Of the 18 EoIs, 17 were shortlisted based on the eligibility criteria, and non-disclosure agreements have been signed with the 17 parties, which are doing due diligence.

The expected closure of the IL&FS group’s stake sale in these companies would depend on the progress of due diligence, said the report. Similarly, the board received five EoIs for selling IL&FS group’s stake in the Chongqing Yuhe Expressway Company in China, and further due diligence on the asset has started. On the sale of non-core assets, 30 properties belonging to IL&FS group were identified.

For most of the properties, an international property consultant has been appointed and advertisements inviting EoIs have been issued. So far as the GIFT City in Gandhinagar is concerned, where the Gujarat government has agreed to purchase 50 per cent stake of IL&FS, the valuer has been identified and the valuation process is underway.

The board has dissolved Infrastructure Development Corporation of Assam and Jharkhand E-Governance Solutions & Services. Also, it had identified 36 luxury cars for sale and 23 cars have been sold so far for Rs 4.92 crore. It is expecting to complete the sale of the other cars in the next few weeks.

The board has recommended Borkar & Muzumdar and G M Kapadia & Co for re-opening and recasting the accounts of IL&FS, IL&FS Financial Services (IFIN), and IL&FS Transportation Networks (ITNL). 

Another eight business verticals have been identified where the group can do away with redundant roles. These include IL&FS, ITNL, IFIN, IL&FS Energy Development Co and IL&FS Environmental Infrastructure among others.

The fourth report of the new board had identified four such verticals. 

The first four verticals that were identified for cutting cost have seen a headcount reduction of 36 per cent between October 2018 and June 2019, resulting in a cost reduction of 53 per cent. Overall manpower optimisation initiatives which have been implemented across the group have cumulatively resulted in a headcount reduction of 43 per cent from October to June, leading to a saving of nearly 47 per cent in the annualised bill.

The board is also looking to lease out spaces owned by the IL&FS group to generate revenue, to continue as a going concern. The board has rented out space in the IL&FS Financial Centre to IDFC Bank for Rs 1.17 crore per month.