IL&FS lays out road map for debt resolution
Infrastructure Leasing and Financial Services (IL&FS) Group expects to resolve over Rs 57,000 crore of its debt, which is more than 50 per cent of its overall debt of Rs 99,000 crore.
Of this, the group estimates to address around Rs 50,500 crore of its debt by March 2021 and an additional debt of Rs 6,600 crore beyond this fiscal.
The Centre had appointed a new board in IL&FS in 2018, led by veteran banker Uday Kotak.
Speaking to the press on Monday through a video conference, Kotak, who is the group’s non-executive chairman, said, “We are putting out transparently things that we see today and our reasonable estimate of how things look as we go forward. We are committed to this road map and we will go all out as IL&FS board and management to make it happen.”
Till June 30, 2020, IL&FS has addressed debt of Rs 17,640 crore from a combination of completed asset sales, debt repayment to green entities (those which can service their debts), debt discharged in non-green entities and available cash balance across the group.
The new board also shared a quarterly plan for this financial year that estimates addressing additional debt of Rs 8,800 crore by the second quarter, Rs 18,000 crore by the third quarter and over Rs 6,000 crore by March 31, 2021 — aggregating to Rs 50,500 crore.
It added that the efforts towards resolving additional debt of Rs 6,600 crore are likely to continue beyond the year.
The group has proposed to set up one of the country’s largest InvITs with a target gross value of Rs 13,000 crore. It includes three special purpose vehicles where debt of Rs 5,000 crore has been restructured.
The group is also in an advanced stages of concluding the sale of 15 entities with resolution of nearly Rs 8,500 crore and plans to restructure additional debt of Rs 4,900 crore.
Kotak said the group is facing challenges in recovery in its non-banking finance company – IL&FS Financial Service (IFIN), where loans were given to large companies that are themselves in deep trouble.
"We have virtually got zero recoveries on some of those large loans. Some of them are in excess of Rs 1,000 crore or higher," he said. Kotak added that the COVID-19 pandemic has in some ways delayed the progress in resolution of the group's assets though he was quick to express optimism that the firm will be able to meet the resolution roadmap set for the year.