IL&FS addresses debt of Rs 43,000 cr so far; raises recovery estimate to Rs 61K cr

Crisis-ridden Infrastructure Leasing & Financial Services (IL&FS) on Thursday said it has addressed aggregate group debt of Rs 43,000 crore so far and expects to cross Rs 51,000 crore by September 2021.

The debt-laden group has further enhanced its estimates of aggregate debt recovery to Rs 61,000 crore beyond September 2021.

Last year in October, the group had targeted to address Rs 50,300 crore of its overall debt by March 2021 and over Rs 56,000 crore by FY2022. The group's overall debt stood at Rs 99,000 crore, as of October 2018.

“The total money owed by IL&FS to financial creditors was Rs 1 lakh crore (including non-fund based exposures). As of today, we have broadly addressed about Rs 43,000 crore, which is roughly about 43-44 per cent of the total debt,'' the Group's Chairman Uday Kotak told reporters while sharing the quarterly update on the ongoing resolution process.

The aggregate addressed debt of Rs 43,000 crore comprises Rs 26,800 crore basis completed entity monetisation initiatives and accrued cash balance, a Group release said.

The amount also includes Rs 14,350 crore of additional net recovery expected from resolution and restructuring applications filed with and awaiting approval of the NCLT (Mumbai) and NCLAT and Rs 1,926 crore from the Supreme Court verdict passed in favour of Rapid Metro Gurgaon, it said.

It said the overall debt addressed is expected to cross Rs 51,000 crore by September 2021.

“Between now and September, 2021, we see this (Rs 43,000 crore of addressed debt) number going up in excess of Rs 50,000 crore. Thereafter, we are increasing our overall estimate of what we think we can resolve to Rs 61,000 crore, or close to 62 per cent, of the total debt,” Kotak said.

The upgrade in potentially addressable debt by Rs 5,000 crore (to Rs 61,000 crore) has been largely on account of improved valuations, better operating performance and enhanced recoveries from non-group exposures, the Group said.

It said Rs 8,000 crore of additional debt will be addressed by September 2021 through monetisation of stake in ONGC Tripura, Warora Chandrapur and Karyavattom Stadium; phase 2 of InvIT including five road SPVs (special purpose vehicles); and receipt of expected settlement claims from road authorities for Khed Sinnar Expressway and Srinagar Sonmarg Tunnel.

The recovery of close to Rs 10,000 crore is likely to spill over beyond September 2021 on account of various reasons, including procedural complexities, the release said. This includes sale of Paradip Refinery, Mangalore SEZ, Tamil Nadu Water, ILFS Prime Terminals Fujairah, Hill County Properties; phase 3 of InvIT; expected receipt of settlement claims for balance road assets, among others. The board is also looking at raising around Rs 1,300 crore by selling real estates, including two towers in Gift City, near Gandhi Nagar, and its headquarters in Bandra Kurla Complex, Mumbai.

''We have already run the sale process. The bids are expected in both cases by next month. Once the bids come in, we will take it to the next stage,'' IL&FS managing director C S Rajan said.

Out of total 347 entities under IL&FS Group (as of October 2018), a total of 186 entities stand resolved till date, while the remaining 161 entities are under various stages of resolution, the Group said. Rajan said the Group plans to reduce the number of entities to below 100 through liquidation of those companies which are not operating, closure and sale of many entities.

According to Kotak, the layered structure of the Group is a challenge and the board will have to continue 'unpeeling the onion'.