PMO examines the debt crisis IL & FS; Board submits recovery plan to NCLT by October 31st

PMO reviews IL & FS crisis and Board stimulus plan on Oct. 31

The Government-appointed Infrastructure and Financial Leasing Services (IL & FS) Board will submit a reorganization plan to the National Corporate Law Tribunal (NCLT) on October 31. The council did not ask for a bailout from the government; instead, he plans to monetize some assets for the stimulus, said an official source. Meanwhile, the Prime Minister's Office (PMO) has learned that it held a meeting on Thursday to discuss the crisis at IL & FS, another source told FE.

The meeting would have taken stock of the measures envisaged to resolve the crisis quickly in order to prevent its contagion from spilling over the entire financial system.

The new board, led by Kotak Mahindra Bank Vice President, Uday Kotak, will hold formal meetings with shareholders and lenders once the plan is submitted to NCLT on Oct. 31 and begin the monetization process. , the sources said. Entities that are relatively fit and manage their own debt will not be put up for sale at this time. Initially, the road projects will probably be on the block, followed by some energy assets. Submissions for various projects should be received by December. IL & FS Financial Service, a non-bank financial corporation and a wholly-owned subsidiary of IL & FS, and IL & FS Energy Development are also likely to sell stakes.

Prior to the hearing at NCLT, the new board of directors appointed former Rajasthan Secretary General, CS Rajan, to the board of directors of the group company, IL & FS Engineering , as new director.

ITNL has 25 road projects in India, of which 18 are operational, while four toll projects and three annuity projects are still under construction. According to analysts, of the 18 operational projects, some projects are about to be completed and are therefore less likely to be sold.

According to some sources, IL & FS is expected to be able to draw approximately Rs 17,000 crore from the sale of 10 of its projects owned by its road development subsidiary, IL & FS Transportation Networks Limited (ITNL), taking into account toll levels and type of projects.

One of the sources mentioned by FE said: "This does not take into account the haircuts that could arise due to the desperate situation in which the company is located, given the shortage of liquidity. They may be forced to sell certain assets at a discounted value. "

ITNL's 10 road projects have a debt of almost R14,000,000. According to sources, the toll projects that can generate significant funds for the company are the Baleshwar-Kharagpur (BKEL), Pune-Solapur, Moradabad-Bareilly (MBEL), Sikar-Bikaner Highway (SBHL) and West Gujarat highways. Annuity projects include East Hyderabad, Hazaribaugh-Ranchi, Jorabat-Shillong Expressway (JSEL), Chenani-Nashri Tunnel (CNTL) and Thiruvananthapuram City Roads.

In its order dated October 1 authorizing the Department of Corporate Affairs to replace the former IL & FS Board of Directors, the court also ordered the new board of directors to submit it to him. a resolution plan by October 31st.

The decision to revive the indebted company has accelerated this week when IL & FS has appointed Arpwood Capital and JM Financial Consultants as financial advisors and Alvarez & Marsal as restructuring consultants to develop and develop To execute a resolution plan.

The board has already decided to conduct a forensic audit of IL & FS to clarify its operations and its actual status of its financial situation. IL & FS actually has a complex labyrinth of 348 entities, more than the double of 169 weapons previously assumed.

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