Mumbai: Cash-strapped Infrastructure Leasing and Financial Services (IL&FS) Group on Monday said it expects to address over ₹57,000 crore of debt, which is around 57 per cent of its overall debt of ₹99,000 crore.
Of this, the group estimates to address close to ₹50,500 crore of its debt by March 2021, and an additional debt of ₹6,600 crore beyond FY21. However, it did not give any timeline for addressing the additional debt of ₹6,600 crore.
The group shared its estimates of debt which would be addressed over the next three quarters.
Speaking about the new plan to address debt, the group's non-executive chairman Uday Kotak 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 roadmap and we will go all out as IL&FS board and management to make it happen."
Till June 30, 2020, the debt-laden company has addressed debt of ₹17,640 crore, which is around 18 per cent of its total debt, from a combination of asset sales, debt repayment to green entities, debt discharged in non-green entities and available cash balance across the group.
The board shared a quarterly plan that estimates addressing additional debt of ₹8,800 crore by second quarter of FY21, ₹18,000 crore by the third quarter of FY21 and over ₹6,000 crore by the end of fourth quarter of FY21 -- aggregating to ₹50,500 crore by end-FY21.
It further said efforts towards resolution of additional debt of ₹6,600 crore are likely to continue beyond FY21 as the board expects the resolution of major holding companies to take a longer time.
"This is the game plan we have given considering the risks, to the best of our judgement," Kotak said.
The revised value accounts for around 57 per cent of overall debt and is significantly higher than the average realization till date for financial creditors under the Insolvency and Bankruptcy Code (IBC) process, the group said.
It has proposed to set up one of the country's largest infrastructure investment trusts (InvITs) with a target gross value of ₹13,000 crore. It includes three special purpose vehicles (SPVs) where debt of ₹5,000 crore has been restructured.
The group is in advanced stage of concluding the sale process of 15 entities with resolution of nearly ₹8,500 crore and plans restructuring of additional debt of ₹4,900 crore.
The number of subsidiaries of the group has reduced to 276 from 347 earlier. It expects it to further come down to around 60 by March 2021.
The government, in 2018, had seized control of the debt-strapped group and superseded its board with the one led by Kotak.
The group's board has developed a group resolution framework that received National Company Law Appellate Tribunal's (NCLAT) approval on March 12, 2020.
Kotak said the group is facing challenges in recoveries in its non-banking finance company IL&FS Financial Service (IFIN), where loans were given to large companies that are themselves in deep trouble.
Of the total balance sheet of ₹16,000-18,000 crore, IFIN's book is highly concentrated to a few large groups. This is in addition to the lending to group entities, he said.
"Those IFIN loan recoveries are turning out to be one of the most difficult aspects because of the situation and the quality and the characteristics of borrowers, which we as a new board cannot understand the logic and the prudence why these loans were given in the first place."
"We have virtually got zero recoveries on some of those large loans. Some of them are in excess of ₹1,000 crore or higher," Kotak said.
The COVID-19 pandemic has in some ways delayed the progress in resolution of the group's assets, he said, adding, "But we are chugging along. We are not giving up and I believe that the whole roadmap put out by IL&FS management and board is something we are deeply committed to."
This story has been published from a wire agency feed without modifications to the text.
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