Debt-laden Infrastructure Leasing and Financial Services (IL&FS) Group, which had earlier estimated to address debt of around Rs 8,800 crore in the second quarter of FY21, on Saturday said it has been able to address debt of just around Rs 1,460 crore during the period due to COVID-19 related delays. The group said the Rs 7,300-crore shortfall in the September target has been rolled over for achievement in subsequent quarters.
The cash-strapped group has, however, maintained its earlier estimates of addressing more than 50 per cent of the overall debt of over Rs 99,000 crore as of October 2018. “As compared to the previous update, the Rs 7,300-crore shortfall in target for debt addressed by September 2020 is being rolled over for achievement in subsequent quarters,” the group said in a release.
“The delay has been mainly caused on account of significant impact of COVID-19, which has added time and logistical complexities in the process of completing discussions with stakeholders and in obtaining approvals from lenders, regulators and judicial authorities,” it said. Of the Rs 7,300 crore of shortfall in the target of Q2 FY21, around Rs 4,200 crore of debt will be addressed in Q3 FY21 and Rs 3,100 crore in Q4 FY21, the group said.
In July, the group had estimated to address close to Rs 50,500 crore of its debt by March 2021 and an additional debt of Rs 6,500 crore beyond FY21. The Uday Kotak-led board had also shared a quarterly estimates of addressing additional debt of Rs 8,800 crore by Q2 FY21; Rs 18,000 crore by Q3 FY21 and over Rs 6,000 crore by the end of Q4 FY21 — aggregating to Rs 50,500 crore by the end of FY2021.
As of June 30, 2020, it had addressed debt of Rs 17,640 crore. The group, in the release, said by September 2020, an additional debt of around Rs 1,460 crore has been addressed — by way of sale of education business, recovery from non-IL&FS group entities, increase in cash balances and debt repayment in green entities, increasing the overall debt addressed based on cash balances to Rs 19,100 crore.
The group has revised its earlier quarterly estimates for addressing the debt. Of the earlier debt resolution target of Rs 18,000 crore for Q3 FY21, resolution of Rs 10,000 crore is being moved to be achieved in Q4 FY21.
Besides, the group is also expecting to receive claims from concession authorities/pre-payments and recovery of loans and investment to non-IL&FS group in the third quarter. “As per revised estimates, Rs 13,200 crore of additional debt is projected to be addressed by December 2020. This includes Rs 8,150 crore resolved through the proposed InvIT for which an ‘in-principle’ approval from SEBI has been received,” the release said.
The number of entities resolved as of September 2020 stands at 173, that is half the original number of 347 entities of the IL&FS Group, the release said. Elsamex S.A., an IL&FS Group company with 100 step-down subsidiaries, was admitted into insolvency during the September 2020 quarter, thus contributing to the substantial reduction in the number of entities of the IL&FS Group, it said.
On Friday, Punjab and Sind Bank said it has declared IL&FS’s subsidiary IL&FS Financial Services (IFIN) as fraud and also reported it to the Reserve Bank of India (RBI) as per regulatory norms. The bank said IFIN is an NPA account with it and has an outstanding dues of Rs 561.13 crore.