Court allows 22 IL&FS Group entities to repay creditors

From The Web - India
Typography
Mumbai: The National Company Law Tribunal (NCLT) on Monday lifted the moratorium on 22 IL&FS Group companies, allowing them to repay their loans. However, lenders are in for significant bad loan-provisioning with the company stating that most group entities are not in a position to meet their debt obligations.

On Monday, the tribunal also lifted payment restrictions on 133 foreign group companies. The court order follows an affidavit filed by IL&FS, categorising group companies into international and domestic, and the domestic into further three lists — green, amber and red. The green companies were the ones generating enough cash to meet all their payment obligations, while the amber list included those who could pay only some creditors. Companies in the red list were the worst placed financially (see graphic).


The 22 Indian companies that are free to repay creditors include North Karnataka Expressways, which held back from repaying bondholders because of the court order. Their failure to repay resulted in a downgrade by rating agencies last month, forcing investors to mark down their investments. Besides this, a host of companies on the block — including IL&FS Securities and IL&FS Solar Power — along with various companies housing wind power projects are in the green list.
The companies where lenders will have to make provisions are the parent IL&FS, IL&FS Financial Services, IL&FS Transportation Networks, IL&FS Energy Development Company and a host of other special purpose vehicles that are in the red list.
IL&FS Tamil Nadu Power and the road companies, which hold a bulk of IL&FS’ assets, are in the amber category, indicating that lenders might need to make provisions on their exposure to these companies. Eventually, lenders may have to take a haircut as part of the resolution process. The road projects in the amber list includes Jharkhand Road Projects Implementation Company, which was downgraded last month. Among others are the ITNL Road Infrastructure, Chenani-Nashri Tunnelway, West Gujarat Expressway and Moradabad-Bareilly Expressway.
Besides State Bank of India, other lenders of IL&FS include Bank of Baroda, Punjab National Bank, and Union Bank of India. Banks had asked the RBI to allow them to skip provisions on this loan as the company management was now controlled by the government-appointed board. However, the RBI had directed banks to start making provisions. Many banks have started making provisions in their loans to the IL&FS Group. In December, Bandhan Bank set aside Rs 385 crore in provision for its exposure to the troubled infra financier. IndusInd Bank had provided Rs 255 crore towards its IL&FS Group exposure of Rs 3,000 core.
Advertisement

Mumbai: The National Company Law Tribunal (NCLT) on Monday lifted the moratorium on 22 IL&FS...

Continue Reading On TOI - Business


Advertisement

Translator

Advertisement
Advertisement

SolarQuarter Tweets

Follow Us For Latest Tweets

SolarQuarter Nominate your Project Engineering & Procurement Team and Save 20% at Solar BoS Meet 2019, 6 and 7 March in New Delh… https://t.co/MghfZT1lpz
Wednesday, 13 February 2019 10:10
SolarQuarter How Are Chattisgarh Rooftop EPC Players Approaching 2019? Find Out At SolarRoof Chattisgarh 22nd Feb 2019, Raipur.… https://t.co/JF3rdCBGt4
Wednesday, 13 February 2019 05:43
SolarQuarter EV Pavillion at Bangladesh Clean Energy Summit 2019 - https://t.co/FsoYfG81i6
Wednesday, 13 February 2019 01:39

Advertisement