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Even as the complete insolvency resolution of all IL&FS entities may take a ‘significant amount of time’, the government has moved the National Company Law Appellate Tribunal’s Delhi bench, seeking approval for interim distribution of group assets worth Rs 16,200 crore to the creditors, including public funds, by March 31.
The government-appointed board of IL&FS had earlier approved the interim plan. The assets identified for interim distribution include Rs 10,950 crore in cash and Rs 5,250 crore worth of InvIT units held by a section of group firms. NCLAT will consider the plea on February 24.
“By March 2022, it is estimated 249 IL&FS group entities would have been resolved by way of sale, liquidation/closure or transfer to the InvIT in exchange for InvIT units and approx. Rs 21,300 crore of assets (cash and/or InvIT units) will be available with various IL&FS group entities,” the government said in an affidavit filed before NCLAT on behalf of IL&FS.
Arguing for the interim distribution of assets available, the government said while the resolution process is at an advanced stage, a majority of the creditors are yet to be settled. “It is also estimated that a significant part of the overall resolution of the IL&FS group will be completed by March 31, 2022 i.e debt having resolution value of approximately Rs 55,000 crore (which is more than 90% of the overall estimated resolution value of Rs 61,000 crore) would be resolved,” it added.
But the final resolution of the remaining IL&FS group entities (resolution value Rs 6,000 crore) is likely to take a significant amount of time due to the complexities involved in the process. Though a large number of IL&FS group entities have already been resolved, distribution of proceeds to creditors has largely taken place in respect of companies where the financial bid amount offered by the successful bidder was less than the liabilities of the entity.
As of December-end, around Rs 7,000 crore has been received by creditors. In addition, debt amounting to approximately Rs 8,500 crore has been taken over by purchasers as part of entity monetisation for some entities. Certain firms are undertaking regular debt servicing too.
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