Recovery of Rs 3,000 cr from 95 IL&FS entities to spill beyond Mar 2022

The resolution of around 95 entities, with an estimated debt recovery of Rs 3,000 crore, of the beleaguered Infrastructure Leasing and Financial Services (IL&FS) group, will take place well beyond March 2022, the board of IL&FS said in its latest update on the resolution process.

According to the Board, by March 2022, around Rs 58,000 crore, or 98 per cent of the estimated amount will be recovered, but a large number of residual entities with low recovery potential would still remain beyond March 2022.

Limited buyer universe, a long-drawn process of closure, and time and costs to keep the IL&FS group as a going concern for completing the resolution are some of the key reasons why the resolution of the residual entities will go well beyond March 2022, the group said.

As of March 31, 2021, the IL&FS Board had addressed recoveries to the tune of Rs 43,600, 44 per cent of the total debt of the group. The IL&FS group had a debt of over Rs 99,000 crore when the new board took over the reins of the company.

Of the Rs 43,673 crore, recovery, on the basis of resolution and cash, is to the tune of Rs 29,030 crore, and for the remaining Rs 14,643 crore, applications have been filed in the bankruptcy courts for recovery.

In April this year, the Board had upped its estimates on the aggregate debt that will be addressed to Rs 61,000 crore from Rs 56,000 crore earlier. The upgrade in potentially addressable debt by Rs 5,000 crore was largely on account of improved valuations, better operating performance, and enhanced recoveries from non-group exposures.

This is well beyond the recovery achieved through the Insolvency and Bankruptcy Code (IBC), where so far only 39 per cent of recovery has taken place through resolutions of corporate debtors and a meagre 3.5 per cent through liquidation.

In Q2FY22, the board will be addressing the debt of 23 entities and make a further estimated recovery of Rs 7,700 crore, of which Rs 4,360 crore will be through entity monetisation and the remaining Rs 3,340 crore will be through InvITs. By September, the group plans to address around Rs 50,000 crore of the total estimated recovery amount.

In the period between October - March, the debt of another 18 entities will be addressed, with an estimated recovery of Rs 6,700 crore, of which Rs 2,050 crore will be recovered through entity monetisation, Rs 2,350 crore will be through InvITs, and the remaining through termination and sale of real estate assets.