Weighed down by debt, the road projects of IL&FS Transportation Networks (ITNL) have so far struggled to find buyers. However, the new management at Infrastructure Leasing and Financial Services (IL&FS) are restructuring the debt of individual projects to make them viable for investors.
In an affidavit submitted at the National Company Law Appellate Tribunal last Friday, IL&FS said that it has signed term sheets with lenders of Jharkhand Road Projects Implementation Company and West Gujarat Expressway Ltd to restructure the debt on the special purpose vehicles. The lenders of Moradabad Bareilly Expressway Ltd have also agreed to a restructuring, pending approval from Bank of India. The term sheets will re-classify these projects are solvent “green” entities, making them more attractive to potential buyers. These entities have outstanding loans of about ₹3,300 crore, which they will now begin servicing again.
“IL&FS’ attempt to sell its road assets has stalled, with very few players interested in continuing the process after the due diligence was done,” an infrastructure consultant told Mint on the condition of anonymity. “There were several who showed interest initially, but no binding term sheets for sale have been signed yet.”
The affidavit added that the company is following the same procedure on Hazaribagh Ranchi Expressway Ltd and nine other “amber” entities, to make them fully solvent. IL&FS will take more time to come to a solution on the insolvent “red” entities on its books, the affidavit said.
In February, IL&FS said it had received over 30 expressions of interest (EOIs) for its road assets, which include seven operating annuity-based road projects of about 1,774 lane km, eight operating toll-based road projects of 6,572 lane km, four under-construction road projects of 1,736 lane km, besides three other EPC (engineering, procurement, construction) and O&M (operations and maintenance) businesses, and a sports complex in Thiruvananthapuram.
In its initial evaluation of the quality of assets, the management at IL&FS had found that the group has only 22 fully-solvent entities, which can pay off their combined debt of₹6,605 crore, called the “green” entities. The rest of its₹99,000 crore is stuck in partially and fully insolvent assets.
Source: Mint