We’ll recover at least half the money: IL&FS

The government-appointed management committee of the IL&FS group says it expects at least half of the group’s debt to be resolved, recovered or restructured. And, to do a significant portion of that by March 2020.

“(That is) our good faith view at this point of time,” said Uday Kotak, non-executive chairman of the group. “When we are saying 50-plus per cent is our estimate, we are saying that we are confident of actual resolution or recovery of at least 50 per cent of ~94,000 crore.”

The group is in the process of addressing ~36,400 crore of debt till date, of which recovery or resolution of at least ~ 30,000 crore is expected, it says. For now, the group is targeting low hanging fruit. Such as the sale of the wind energy subsidiary to ORIX Corp, for which the National Company Law Tribunal has given permission, with banks also expected to shortly do so. The

amount of ~4,320 crore related to the special purpose vehicle in question can be fully recovered through the deal, says the management.

On the other ‘green’ entities, or group firms that can service debt on their own, the management says it is trying to make these “positive equity” and then pass it on to entities that can better manage these. For now, ~7,930 crore of such dues are getting addressed.

For ‘Amber’ or ‘Red’ companies in roads and education, bids are being submitted to the committees of creditors (Cocs). The company has received bids of ~8,100 crore for these companies that hold debt of ~10,150 crore. For entities with low or no bids, the management will consider an infrastructure investment trust (INVIT) model. At present, the net cash available is ~3,200 crore. The INVIT model will be particularly considered for nine domestic road projects with total debt of ~10,800 crore. Of these, the group got lower bids for five projects and none for the remaining four.

The final decision on whether to accept the bids or the INVIT model will rest with the lenders. IL&FS is also considering an option whereby lenders convert their debt to units in the INVIT for these nine projects.

In September, IL&FS said it had got binding bids worth ~13,000 crore for 10 road projects with combined debt of ~17,700 crore. The group on Tuesday said it had decided to send five of these bids for COC approval, for debt worth ~9,500 crore. Also on Tuesday, it said a bid had come from abroad for its road project in China, where debt exposure is ~1,600 crore. “The binding bid received is with equity value,” IL&FS said. The group is also in discussions with lenders for restructuring debt worth ~8,000 crore for its Tamil Nadu power project.