IL&FS Group To Pay Rs 5,000 Crore In InvIT Units And Cash To Creditors
The debt-laden IL&FS Group has begun distributing Rs 5,000 crore to its eligible creditors as part of its ongoing restructuring. This interim distribution comprises Rs 3,500 crore in Infrastructure Investment Trust (InvIT) units and Rs 1,500 crore in cash, the company said in a exchange filing on Monday.
The interim distribution by the IL&FS Group is primarily being carried out by three of its holding companies: Infrastructure Leasing and Financial Services (IL&FS) Ltd., IL&FS Financial Services Ltd., and IL&FS Transportation Networks Ltd. These companies hold the majority of the Group's debt and house large creditors and public funds.
Following this payout, the IL&FS Group will have discharged approximately Rs 43,000 crore of debt. This represents over 70% of their estimated Rs 61,000 crore total debt resolution target, and includes the current interim distribution, the company said.
The Rs 3,500 crore in InvIT units are issued by Roadstar Infra Investment Trust, which comprises six underlying road assets: MBEL, SBHL, PSRDCL, BAEL, TRDCL, and HREL. The total enterprise valuation of Roadstar Infra Investment Trust is Rs 8,576 crore, the filing said.
These InvIT units are being distributed through a private placement followed by listing, as prescribed under regulations.
The board has set Feb. 17, 2025, as the record date for the allocation of InvIT units and cash distribution.
Some of the banks and institutions that will receive units or cash under this phase of distribution include Bank of Baroda, Canara Bank, State Bank of India, ICICI Bank, DBS Bank, LIC Mutual Fund and IndusInd Bank.
Faced with weak responses to individual road asset monetisation efforts, the IL&FS board chose the InvIT route in 2019, as it offered better valuations for creditors. Following necessary approvals, they established Roadstar Infra Investment Trust, appointing Roadstar Investment Managers as the investment manager and Elsamex Maintenance Services Ltd. as the project manager. Six road assets were subsequently transferred to the InvIT.
The National Company Law Appellate Tribunal approved the interim distribution framework in May 2022, based on the recommendation of the new IL&FS Board. This framework aimed to expedite the release of funds and debt discharge to creditors, particularly public funds, while awaiting the final resolution of certain IL&FS Group entities.
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