Eight to 10 subsidiaries of Infrastructure Leasing and Financial Services Ltd (IL&FS) will be up for sale shortly as its state-appointed board of directors explores a turnaround scheme involving the sale of group companies.
The planned sale indicates IL&FS is now going full steam in monetising key group entities, which are not able to service debt as part of the revival strategy. Injeti Srinivas, secretary in the Ministry of Corporate Affairs, said the response to the offer for sale of two entities made earlier this month was overwhelming.
“I understand that expressions of interest for another 8-10 companies will be called for shortly. We are well into the process of sale of subsidiaries as going concerns and (we) will ensure maximum possible realisation (of value) and then meet repayment obligations,” Srinivas told reporters on the sidelines of a conference on the bankruptcy code organized by the Federation of Indian Chambers of Commerce and Industry (FICCI).
Almost all banks and financial institutions had shown interest when IL&FS called for expressions of interest earlier this month for IL&FS Securities Services Ltd and ISSL Settlement & Transaction Services Ltd, Srinivas added. “We are hopeful the board will evaluate them and come up with a proposal.”
The government had superseded the board of directors of IL&FSearly last month and said an SFIO probe was on into the management failure in the company, which defaulted on payment obligations. The group had a debt of more than rs 91,000 crore at the end of March 2018. The National Company Law Tribunal is monitoring its turnaround plan.
The bankruptcy code’s operation was efficient, Srinivas said. Directly and indirectly, it led to the resolution of about Rs 3 trillion of claims, benefiting both financial and operational creditors, he added.
Since the bankruptcy code became operational in December 2016, 9,000 cases have come to bankruptcy tribunals, including cases transferred from the erstwhile Board for Industrial and Financial Reconstruction. Nearly half of them have been disposed of. Bulk of those cases, about 85% of them, were disposed of prior to admission in the NCLT itself.
“Our figures show that more than 3,500 cases got resolved pre-admission and resulted in claims amounting to Rs 1.2 trillion getting settled,” said Srinivas. Another Rs 1.2 trillion came from the resolution of cases under IBC, including those that were in final stages of resolution, taking the total amount of claims settled to Rs 2.4 trillion.
Srinivas said many non-standard loans got converted into standard accounts by virtue of debtors paying back the overdue amount, leading to a recovery of Rs 45,000-50,000 crore. “That makes the direct and indirect impact of the Insolvency and Bankruptcy Code close to Rs 3 trillion, which is a huge amount.”
Source: Livemint, November 25,2018