IL&FS resolves Rs 61,000 cr of Rs 99,355 cr debt

Mumbai: Three-and-a-half years after the government asked banker Uday Kotak to head a new board to salvage the largest non-banking infra lender IL&FS that went belly up in October 2018, the management has announced the resolution of Rs 61,000 crore or 62 per cent of the Rs 99,355 crore the group with 347 entities owed to the system.

Addressing the media, Kotak also announced the end of his term as the chairman of the six-member board from April 2, and the elevation of managing director C S Rajan as chairman and managing director for a six-month term.

Explaining the recovery of Rs 61,000 crore which is 62 per cent of the total IL&FS owed to banks and other lenders across 347 group entities, Kotak said as of March 29, they have completely addressed Rs 55,000 crore debt through the sale of assets and or taking the companies back as running concerns, along with a few best of them paying back Rs 1,000 crore in interest alone by fully servicing loans.

Of the total 347 entities, 248 have been resolved, Kotak said, adding, the group had over 100 entities overseas and of the remaining 101 entities some are defunct and only the government can take a call on them.

Of the Rs 55,000 crore of addressed debt, up from Rs 52,200 crore in early November 2021, means the board has been able to meet 0ver 90 per cent of its commitment made for this fiscal, he said.

Of the Rs 61,000 crore of aggregate resolution, Rs 21,000 crore have been fully discharged/paid back by way of asset monetization and surprisingly, Kotak said, public sector banks, which lent only to operating SPVs, gained the maximum from the resolution, while the so-called better-nosed private sector banks went by external credit ratings and lost badly. Yet 62 per cent recovery is one of the best and is exactly double of the average IBC recoveries as of December 2021 at a low 31.3 per cent, Kotak said.