IL&FS expects 50 per cent debt recovery by March 2020, says board chief Uday Kotak

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Published: October 2, 2019 9:07:51 AM

As of October 1, 2019, the total debt getting addressed is Rs 36,400 crore. Of this, the conservative estimate of debt recovery is around Rs 30,000 crore.

Of this, the conservative estimate of debt recovery is around Rs 30,000 crore.

The IL&FS board is hopeful of recovering at least 50% of the total debt of Rs 94,216 crore owed to domestic lenders by March next year, Uday Kotak, the board’s non-executive chairman said on Tuesday.

As of October 1, 2019, the total debt getting addressed is Rs 36,400 crore. Of this, the conservative estimate of debt recovery is around Rs 30,000 crore.

Further steps that will help the board reach its 50% debt recovery target include recovery of loans given to third parties through the group’s NBFC arm – IL&FS Financial Services; settlement of claims filed by the group’s transportation vertical with government authorities; and asset monetisation.

“There is uncertainty for now about how and whether the remaining debt will be recovered,” one of the officials said.  As a part of its plan to address debt, the company is considering setting up an Infrastructure Investment Fund (InVIT) for nine of its road assets with a total debt of Rs 10,830 crore. These entities have received either low or no bids.

Of the 14 completed road assets, the board decided go ahead with deals on five of the assets where they expect to recover about `7,500-8,000 crore.

The government on Tuesday also extended Kotak’s term as the non-executive chairman of the IL&FS board till October 2, 2020.
Kotak also said the group has addressed most of the low-hanging fruits in terms of debt recovery.

At the press conference on the completion of a year since the government-appointed board took over IL&FS, Kotak observed that underlying SPVs with secured debt were rated lower than their holding companies which had exposed the group to unnecessary risk by way of unsecured debt.

The group owes nearly Rs 1 lakh crore to its creditors.

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