IL&FS Group Reduces Debt by Rs 35,650 Crore Through Asset Monetization and Repayments

IL&FS Group Reduces Debt by Rs 35,650 Crore Through Asset Monetization and Repayments Image/NDTV

VoM News Desk | October 3, 2023 | 06:05 PM IST | Breaking News | Follow on Google News

IL&FS Group Reduces Debt by Rs 35,650 Crore Through Asset Monetization and Repayments

IL&FS Group Reduces Debt by Rs 35,650 Crore Through Asset Monetization and Repayments

The IL&FS Group, which faced a total debt of Rs 99,000 crore, has successfully settled approximately Rs 35,650 crore of its debt through a combination of asset monetization, auto debits by banks, and repayments as of September. This achievement marks a significant milestone in the financial recovery of the group.

Key Debt Reduction Initiatives

The group recently completed a repayment of about Rs 10,000 crore through interim distribution across 14 companies within its portfolio. These companies include IL&FS Transportation Networks (ITNL), IL&FS Financial Services (IFIN)and the group’s holding company, IL&FS Ltd.

IL&FS Group Managing Director Nand Kishore expressed satisfaction with the progress, highlighting that this achievement was made possible by the new board’s proposed interim distribution framework, which received approval from the National Company Law Appellate Tribunal (NCLAT) last year. This framework allowed the group to make interim payouts to eligible creditors, including public funds and debenture holders, without waiting for the final resolution.

Interim Payouts to Creditors

The group initiated interim payouts to eligible creditors of various entities, totaling over Rs 2,400 crore in September. This is in addition to the nearly Rs 7,600 crore disbursed across 12 group companies under the approved interim distribution framework in the past year.

The first interim payout of Rs 810 crore was initiated with respect to IL&FS Ltd. Out of this amount, Rs 180 crore will be distributed to domestic and international banks, while approximately Rs 630 crore will go to over 1,100 public debenture holders, public funds, and others.

IL&FS Group also initiated an interim payment of Rs 796 crore to eligible creditors in ITNL. This includes Rs 305 crore for secured and unsecured creditors, Rs 315 crore for public debenture holders, public funds, and others, and Rs 176 crore for group creditors.

Additionally, the second tranche of interim payout amounting to Rs 807 crore has been initiated for eligible lenders of IFIN, with Rs 574 crore allocated to banks and financial institutions and Rs 233 crore for debenture holders and public funds.

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Progress and Resolution Estimates

In the last year, the IL&FS Group has successfully completed interim payouts to external creditors of 12 companies, reducing their debt burdens. The group’s overall resolution estimate stands at Rs 61,000 crore, representing 62% of its total fund-based and non-fund-based debt, which stood at over Rs 99,000 crore in October 2018 when the company entered into resolution proceedings due to allegations of management corruption and fund diversion.

These debt reduction initiatives demonstrate the group’s commitment to financial recovery and its ongoing efforts to address its financial challenges.

IL&FS Group Reduces Debt by Rs 35,650 Crore Through Asset Monetization and Repayments

VoM News Desk

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