INSUBCONTINENT EXCLUSIVE:
Mumbai: In a relief to operational, unsecured creditors and provident funds, the IL-FS board has decided to revise the distribution
framework for group resolution.
The new board proposed to release 55 companies out of moratorium
Some of these companies are under corporate insolvency process or facing liquidation and a few entities have limited business operations,
the board told the National Company Law Appellate Tribunal (NCLAT).
The new board proposed a mechanism for distribution of the financial bid
amounts or liquidation amounts for considering the interest of each set of creditors
distributed to each class of creditors on pro-rata basis
assessment of the New Board is that the revised distribution framework is a fair and equitable manner of distribution of the relevant sale
ministry of corporate affairs, a copy of which has been seen by ET.
IL-FS defaulted on its debt obligations in August 2018, triggering a
financial sector meltdown in India
The government appointed board took over IL-FS in October 2018 and named Uday Kotak as the chairman of the board
The board is addressing total outstanding debt of ?94,000 crore
Out of the total debt, ITNL, energy development arm IEDCL, IFIN and IL-FS together hold ?48,000 crore.
An IL-FS spokesperson declined to
comment on the story.
Provident funds of companies such as Philips India, SAS employee provident fund trust, British Airways Cabin Crew
Pension Fund, PLC staff fund and superannuation fund are estimated to have invested ?15,000 crore to ?20,000 crore in IL-FS group
entities.
The distribution of proceeds from sale of wind energy is pending and will be based on the revised distribution framework
Orix has bought seven special purpose vehicles from IL-FS for ?5,920 crore
The group has got interests in education business.
Resolution through sale of wind, road and education is likely to fetch ?18,000 crore
The board is actively considering alternatives such as InvIT for value maximisation of assets with debt of ?10,300 crore
The company has received a binding bid for Chonqing Yuhe road asset, which has debt of ?1,600 crore
It is considering a Swiss challenge process for sale of technology, environment and BPO assets
The board expects recovery of ?3,000 crore to ?3,500 crore through sale of real estate assets including the IL-FS headquarters in Bandra
Kurla Complex.
At a parent level, IL-FS took equity in roads, power companies and educational institutions that led to it promoting hundreds
Much of its debt is equity in operating companies, which would make it difficult to recover as other assets are yet to generate cash.
Six
entities are already under the corporate insolvency resolution process or CIRP
Resolution has been passed for 7 entities, 8 of them are green entities with no debt and are under monetisation
There are 6 entities which are trusts with no operations and 5 such companies with insignificant assets.
The board observed that creditors
are concerned about maximizing recovery at an individual entity level without regard to the adverse impact this would have on other
