The committee of creditors (CoC) of IL&FS has approved the sale of the group's education arm, Schoolnet India, to Career Point Publications, which was the only party to put in a bid.
The committee of creditors (CoC) of IL&FS has approved the sale of the group’s education arm, Schoolnet India, to Career Point Publications, which was the only party to put in a bid.
“With this sale, the group aims to address around Rs. 650 crore of debt,” an official said requesting anonymity.
The group currently holds 73.7% stake in its education arm, and Schoolnet India holds 80% stake in two group subsidiaries – IL&FS Skill Development Initiative and Skill Training Assessment Management Partners. The company said that that after the sale, Career Point will assume responsibility for all of Schoolnet India’s debt. As a part of the transaction, the winning bidder will also get Schoolnet India’s entire stake in IL&FS Skill Development Initiative. Career Point made a binding offer to purchase the business and part of the debt of Schoolnet India’s two subsidiaries.
“The board was hoping for a few bidders, but Career Point Publications was the only one. They made a cluster bid for these entities, as some of them have negligible enterprise value, and the lenders approved the bid,” said one person aware of the process, without disclosing further details regarding the bid.
Career Point’s bid was approved by 78% of the creditors on November 5, and by the board of directors on November 7. “As next steps under the resolution framework, approval of Justice (Retired) DK Jain will be sought before seeking the approval of the National Company Law Tribunal (NCLT), Mumbai Bench,” the company said.
The IL&FS group has defaulted on short-term and long-term debt obligations of nearly Rs. 1 lakh crore since August 2018. The IL&FS board was replaced by a government-appointed one last year following the defaults. In September, IL&FS had received bids worth Rs. 13,000 crore for 10 of its road assets.
The government-appointed board told reporters earlier that it hopes to recover around 50% of the group’s debt by March 2020. The government recently also extended Uday Kotak’s term as the group’s non-executive director till October 2, 2020. The total outstanding of the group as on September 2018 is Rs. 99,354 crore.