IL&FS lenders could soon recover Rs 16,372 crore from amber firms

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Updated: July 13, 2019 6:54:37 AM

In its February 11 order, the NCLAT had permitted ‘green’ companies to service their debt obligations as per the scheduled repayment within the resolution framework.

Of the 302 IL&FS group companies, 133 were incorporated outside India and as such are outside the territorial jurisdiction. (File photo)Of the 302 IL&FS group companies, 133 were incorporated outside India and as such are outside the territorial jurisdiction. (File photo)

A clutch of lenders including IndusInd Bank and L&T Finance could soon recover Rs 16,372 crore from ‘amber’ companies in the IL&FS Group. Amber companies are those that are able to partially pay off their loans. Of the 13 amber companies, three have been reclassified as ‘green’ or those able to meet all their payment obligations.

In its February 11 order, the NCLAT had permitted ‘green’ companies to service their debt obligations as per the scheduled repayment within the resolution framework. It had also permitted the ‘amber’ companies to make necessary payments only to maintain and preserve them as going concerns.

Senior advocate Ramji Srinivasan, appearing on behalf of IL&FS and the Union of India, on Friday submitted to the National Company Law appellate Tribunal (NCLAT) repayment to the lenders of Jharkhand Road Project Implementation and West Gujarat Expressway would soon start as lenders have already signed binding documents after agreeing to the term sheet.

For Moradabad-Bareily Expressway, binding documents are expected to be signed in a couple of days for the release of payments. All but Bank of India have signed in the term sheet.

“In all the remaining 10 companies including Hazaribagh-Ranchi Expressway Ltd, the same procedure will be followed,” Srinivasan said. Recording the submission, the NCLAT bench asked the IL&FS counsel to update the appellate tribunal with regard to rest of the 10 ‘amber’ companies within the next 15 days.

With regard to ‘red’ companies, the NCLAT has asked the IL&FS board to file an affidavit, in a week’s time, stating the action it intends to take for 55 such ‘red’ companies with a timeline. The board has also been asked to assess the possibility of these companies turning into ‘amber’ or ‘green’ companies. “If not possible, required steps to be taken,” the bench said.

The NCLAT has also asked the IL&FS Board to specifically state the steps it would take to release the amount for pension and provident funds, army group insurance fund and other such funds. The bench said such funds should get priority.

Regarding an appeal submitted by the IL&FS Board with the regard to state-run ONGC’s intention for transfer/sale of shares held by it in IL&FS group entities through joint ventures at a discounted value instead of fair market value, the NCLAT has allowed the IL&FS Board to implead the state-run firm other related parties as respondents to the concerned appeal. Notice will be issued to ONGC and others.

The NCLAT has scheduled the matter for further hearing on August 8.

Of the 302 IL&FS group companies, 133 were incorporated outside India and as such are outside the territorial jurisdiction. The remaining 169 companies, incorporated domestically, have been divided into three categories on the basis of their debt servicing ability. ‘Green’ entities are those which can pay all their obligations while’ ambers’ are those that can meet their obligations only partially. “Reds” are those which cannot meet any of their obligations.

In a submission before the NCLAT on February 21, the IL&FS Board had submitted the classification of 151 companies — 50 were in the green, 13 amber, 80 red and eight were in different stages of resolution. The remaining 18 were yet to be classified.

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