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The government superseded the board of directors of IL&FS early last month. Photo: Mint
The government superseded the board of directors of IL&FS early last month. Photo: Mint

IL&FS crisis: 10 group firms to be up for sale

Expressions of interest for 8-10 companies will be called for shortly: Ministry of Corporate Affairs secretary Injeti Srinivas

New Delhi: 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."

Also read: I-bankers hit the road for IL&FS’s highway, renewable assets sale

The government had superseded the board of directors of IL&FS early last month and said an SFIO probe was on into the management failure in the company, which defaulted on payment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.

Also read: Regulatory watch on businesses tightened post IL&FS failure

Also read: IL&FS board frames new roadmap to address lenders queries

The bankruptcy code’s operation was efficient, Srinivas said. Directly and indirectly, it led to the resolution of about 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 1.2 trillion getting settled," said Srinivas. Another 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 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 45,000-50,000 crore. “That makes the direct and indirect impact of the Insolvency and Bankruptcy Code close to 3 trillion, which is a huge amount."

Also read: IL&FS crisis impact: Corporates return to banks for loans

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