IL&FS may need impairment of ₹15,000 cr

THE FIRM’S RECOVERY COULD BE CONSTRAINED BY THE QUALITY OF THE COLLATERAL: REPORT

MUMBAI:Crisis-hit Infrastructure Leasing & Financial Services (IL&FS) may require impairments of around ₹15,000 crore in loans and equity in its subsidiaries, a report by Singapore-based REDD Intelligence said.

According to the report, IL&FS reported consolidated debt of ₹91,080 crore, of which ₹68,070 crore is secured and ₹23,024 crore is unsecured. “Given the secondlien nature of the secured loans at IL&FS parent and IL&FS Transportation Networks Ltd (ITNL) parent, recovery could be conproject. strained by the quality of the collateral (equity pledges from operating subsidiaries),” the report said.

REDD Intelligence, a Singapore-based firm that specializes in stressed debt, said the obvious stress is in the ₹4,220 crore equity invested in energy subsidiary IL&FS Tamil Nadu and ₹1,700 crore loan to the energy subsidiary and related party of that “It ran into difficulties after it set up a 1,200 megawatts (MW) coal based power plant and was only able to secure a power purchase agreement for only 540MW. It has been filed into insolvency at the National Company Law Tribunal (NCLT),” the report said, adding that since IL&FS has 175 subsidiaries and 66 joint ventures/associates, there is not enough information disclosed to understand the viability of each project.

The report estimated that ₹5,500 crore in exposure to associates like Hill Country Properties Ltd, Dighi Port Ltd (currently in insolvency) and IL&FS Engineering and Construction Co. Ltd (also filed into insolvency) to have limited recoveries and therefore require impairment.

“We estimate that an ₹1,200-1,400 crore write-off is required at its large subsidiary Chenani Nashri Tunnelway Ltd,” it said. REDD estimated a write-off may be required for IL&FS’s ₹1,800-crore exposure to subsidiary IL&FS Maritime Infrastructure Co. Ltd, which has high related party transactions and reported a loss of ₹300 crore in FY18.

An email sent to the company remained unanswered till the time of going to press.