Thursday, April 15

IL&FS advisors redrawing its list of assets

MUMBAI: Newly-appointed advisors to the IL&FS Group are redrawing the list of assets, including road projects fetching regular annuities, which can be sold quickly to enhance liquidity and extricate operating units at the infrastructure financier out of a funds crunch.

They will submit their plans by Saturday and the board will propose the plan before the NCLT on October 31. The IL&FS board has appointed Arpwood Capital and JM Financial as financial and transaction advisors to the IL&FS Group, and the firms are crafting the resolution plans.

“The new advisors are drawing up lists of assets with higher equity value that can be sold quickly to generate liquidity,” said a source close to the development.

“They will present a plan later this week to the board. After the plan is approved by NCLT, the sale process will begin. First, the road projects with annuities will be identified to be sold.”

Arpwood and JM Financial are financial advisors, while Alvarez &Marsal is assisting the board in maintaining strict controls on liquidity on a day-to-day basis at all levels in the group. The advisors will craft a resolution plan and manage stakeholders on implementing resolutions. An IL&FS spokesperson declined to comment. The advisors are looking at the creditors for all 380 subsidiaries of IL&FS.

The new board was set up after the Ministry of Corporate Affairs on October 1moved the NCLT to supersede the company’s then management, much like what the Centre did with the fraud-hit Satyam Computer Services in 2009.

The new board held its third meeting last week and appointed advisors to undertake valuations across potential divestments.

The newly-constituted board of IL&FS has already ordered reduction of operating and non-essential expenses of the financially struggling company and do a fresh audit of accounts. It has formed a committee under vice chairman Vineet Nayyar to chart a roadmap and replaced nominee directors on the boards of the subsidiaries.

IL&FS has got relief from NCLAT in the shape of a moratorium on bankruptcy proceedings until November 13. About 50 creditors, including bond holders, demanded payment from IL&FS under threat of legal proceedings.

SIDBI has filed a petition against IFIN, and Enso Rail Infrastructure against IL&FS Rail.

The company has debt liabilities of Rs 91,000 crore. It has defaulted on several repayments since September, and has been downgraded to D from AAA.

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