IL&FS resolves Rs 56,943 cr debt as of Sept, addresses 93% of target

Infra lending firm's affidavit says it has reduced the number of entities under it from 302 to 101

Infrastructure Leasing & Financial Services (IL&FS) had resolved debt worth Rs 56,943 crore as of September 2022, the infra lender that collapsed in 2018 has told the National Company Law Appellate Tribunal (NCLAT) in an affidavit.

The amount addressed is almost 93 per cent of the total estimated debt that the firm has said it will resolve. IL&FS has to resolve a debt of Rs 61,000 crore from an outstanding amount of Rs 99,355 crore as of October 2018.

In a previous affidavit, the firm had said it had resolved a debt of Rs 55,000 crore by March 2022.

As per the latest affidavit, the estimated debt resolved till date (September 30) was Rs 56,943 crore, and Rs 1,331 crore of debt is being serviced by “green” entities. Green entities are the ones who continue to meet their debt obligations.

The firm has resolved over Rs 43,000 crore worth of debt through asset monetisation, invIT units, and cash balance.

The firm has reduced the number of entities under it from 302 to 101. Domestic entities were reduced to 88 from 169 earlier, and offshore ones to 13 from 133.

IL&FS had a cash balance of Rs 19,699 crore in September 2022, as it focuses on resolution initiatives, including expediting recoveries of loans and investments made by it.

The firm went belly up in 2018, causing a liquidity crisis in the financial sector, resulting in non-banking finance companies (NBFCs) not getting enough funds to grow their business. Subsequently, the mortgage lender Dewan Housing Finance Limited (DHFL) and Reliance Capital also folded up because of the acute liquidity crisis.

Earlier this year, the firm had filed an affidavit for interim distribution of the available cash and InvIt units of approximately Rs 16,361 crore, which include Rs 11,296 crore of cash and Rs 5,065 crore of InvIt units.

In the affidavit, the firm said it has completed the interim distribution to Rapid Metro Rail Gurgaon Ltd (RPGL). The distribution to Rapid Metro Rail Gurgaon South Limited is also at an advanced stage. The interim distribution for IL&FS Financial Services Ltd (IFIN) is being aimed to be completed by December 2022, and for the remaining entities, it will be done in the current financial year (FY23).

The firm told the tribunal that certain other entities have been identified wherein cash/InvIT units are available for interim distribution.

The firm’s board said it is finding it difficult to receive annuities in road projects from the Jharkhand government and facing constraints in completing resolution of IL&FS Wind Energy SPVs to Orix, apart from pending court approvals for resolution.