Creditors of IL&FS Financial Services to get Rs 3,200 cr interim payout

Creditors to IL&FS Financial Services (IFIN) will get an interim payout of Rs 3,200 crore under the NCLAT-approved revised distribution framework. This makes it the largest cash payout to creditors, including 28 lenders and debenture holders, since the government superseded its board in October 2018.

The IL&FS group would also pay back another Rs 1,900 crore for three of its other firms, making the aggregate payout at Rs 5,100 crore, it said.

After the financial violations came to light, the corporate affairs ministry had superseded the board of IL&FS in October 2018. The group had a debt of more than Rs 95,000 crore among nearly 347 group entities when the crisis came to light in October 2018.

Since the resolution began, the group has so far discharged debt worth Rs 27,000 crore.

Banks have secured exposure of over Rs 7,500 crore to IFIN, which will be resolved with a combination of cash payout under the interim distribution plan and allocation of InvIT (Infras­truc­ture Investment Trust) units by way of an IPO later, sources told PTI.  The payout process was initiated on Monday and will be completed over the next few weeks, one of the sources said.

Of the total amount, around Rs 2,250 crore will be paid to 28 public sector, private and foreign banks, and about Rs 950 crore to more than 500 public debenture holders, public funds (including the EPFO and the Army Group Insurance) and others, the statement said.

This is the first interim distribution that will be completed for a vertical holding company under the IL&FS group. The group has already completed the interim payout of Rs 623.3 crore for Rapid Metro Gurgaon and Rs 1,273 crore for Rapid Metrorail Gurgaon South for the secured financial creditors.

With the latest IFIN payout, the group has agreed to pay around Rs 5,100 crore to the eligible creditors across these three companies. In May 2022, the NCLAT approved the interim distribution application of the IL&FS board comprising cash payout and InvIT units.

While IL&FS has already initiated a process for cash payout across select companies through interim distribution, the issuance of Infrastructure Investment Trust (InvITs) units would be undertaken by way of Initial Public Offering that will be launched as per SEBI guidelines.

The IL&FS board has retained its overall estimate at Rs 61,000 crore, representing 62 per cent of overall – fund and non-fund based — debt of over Rs 99,000 crore as of October 2018.