IL&FS group would resolve debt of Rs 55,000 crore by March 2022, the board of the crisis-hit company has stated in its affidavit filed before the National Company Law Appellate Tribunal (NCLAT).
While updating the progress of the resolution progress, the IL&FS board, led by Uday Kotak, said Rs 55,000 crore debt would be resolved through asset monetisation, restructuring and insolvency proceeding initiatives.
Some of this has already been completed while the rest is at different stages of resolution, it said in a brief snapshot on the progress made in the ongoing resolution process till December 7, 2021, and suggested estimates of progress to be made by March 2022.
The IL&FS had a total outstanding debt of Rs 99,355 crore as of October 8, 2018, of which Rs 45,500 crore debt is handled through debt resolution initiatives by March 2022. Of this, debt of Rs 20,500 crore has already been resolved through monetisation, Rs 4,000 crore by way of debt discharged and Rs 21,350 crore in cash available across companies and InvIT unit (Infrastructure Investment Trust) due to be issued.
In addition, the board also expects to resolve Rs 5,300 crore through various "transactions approved by the relevant court/tribunal and pending transaction closure" and Rs 4,200 crore from resolution applications filed with courts and pending approvals.
"As of January 4, 2021, the total number of entities in Respondent No 1 (IL&FS) group has reduced to 111 from 302," the affidavit said. In this, IL&FS's domestic entities have been reduced to 95 from 169, while the offshore entities have been reduced to 16 from 133. The Board had informed to resolve 29 of 60 entities through entity monetization process; 12 road assets under InvIT; 3 assets where concession were terminated and 30 entities where it initiated closure or insolvency proceedings.
"A critical focus of the New Board has been on maintaining the going concern status of the Respondent No. 1 Group. Respondent No. I Group has also been focused on multiple resolution initiatives including expediting recoveries of loans and investments provided/ made by the Respondent No I Group, which amounts will be utilised towards discharging claims of the creditors of the relevant Respondent No I Group entities in accordance with the Revised Distribution Framework approved by this tribunal (NCLAT) vide the March 12, 2020 judgement," the affidavit said.
This has also resulted into an accumulated cash balance of Rs 16,742 crore as of December 7, 2021.
The NCLAT had on March 12, 2020, approved a distribution framework based on "pro-rata distribution" among creditors of debt-ridden IL&FS group from the proceeds of the sale, as suggested by the government. In September 2021, the government had extended Uday Kotak's term as IL&FS Chairman by six months. Kotak, the Managing Director & CEO of Kotak Mahindra Bank, was appointed by the government to help the crisis-ridden IL&FS come out of its mess.
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.
The companies under the green category will be those that continue to meet their payment obligations. The Amber category is for the companies that would not be able to meet their obligations but can meet only operational payment obligations to senior secured financial creditors. The Amber category entities "are permitted to make only payments necessary to maintain and preserve the going concern". "Companies falling in the red category are the entities which can not meet their payment obligations towards even senior secured financial creditors," as per the plan.
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