IL&FS non-banking unit puts $645 mn corporate loans on sale
Photo Credit: Reuters

Infrastructure Leasing & Financial Services Limited’s (IL&FS) wholly owned non-banking arm has put up on sale all its corporate loans, which have turned into non-performing assets (NPAs).

The asset book comprises 70 accounts aggregating to a total outstanding principal of Rs 4,785 crore ($645 million), IL&FS Financial Services Ltd said in a public notice on Friday.

Interest buyers will have to submit a binding bid by January 8, 2021 to purchase the entire asset book, it said. The potential transaction will be conducted on a 100% cash consideration, it added.

IL&FS Financial Services had assets under management of Rs 18,000 crore as of March-end, 2019. The NBFC is yet to declare its results for 2019-20.

For 2018-19, it had reported a net loss of Rs 13,272 crore as compared with a net profit of Rs 9.5 crore in 2017-18.

Its total borrowing as at end-March 2019 from various avenues (debt securities, bank loans, commercial paper, inter-corporate deposits) stood at Rs 14,916 crore.

The sale of the corporate loan book is part of the group’s overall debt reduction plan started in October 2018. Last month, the crisis-hit IL&FS group had said the aggregate value of debt being addressed is pegged at Rs 56,300 crore – with over Rs 50,000 crore ($6.75 billion) likely to be addressed by March 2021.

As per the last update shared in July, the overall debt addressed based on cash balances stood at Rs 17,640 crore.

In the July-September quarter, the company was able to address debt of just around Rs 1,460 crore as against an earlier estimate of around Rs 8,800 crore during the period. The group said the Rs 7,300 crore shortfall in September quarter target has been rolled over for resolution in subsequent quarters.

The group, however, maintained its earlier estimates of addressing more than 50% of the overall debt of over Rs 99,000 crore as of October 2018, by the end of 2020-21.

As per revised estimates, Rs 13,200 crore of additional debt is projected to be addressed by December 2020. This includes Rs 8,150 crore resolved through a proposed infrastructure investment trust.

The number of entities whose debt has been resolved as of September 2020 stands at 173. This is half the original number of 347 entities of the IL&FS group.

The debt-laden infrastructure financier has also invited bids to sell its prime 10-storey corporate home in Mumbai’s Bandra-Kurla Complex. The bids were expected to be submitted by November 20.

In April, IL&FS sold its stake in IL&FS Wind Power Services Ltd to Japan’s Orix for Rs 6.06 crore. Earlier this year, the IL&FS board was planning a sale of its real estate assets worth Rs 3,500 crore and also its stakes in Gujarat International Finance Tec-City (Gift City) valuing approximately Rs 1,200 crore.

In November last year, the firm got approval from its lenders to sell its majority holding in Schoolnet India Ltd (formerly known as IL&FS Education & Technology Service Ltd) to Career Point Publications Pvt. Ltd (CPPPL).

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