he forensic audit report of IL&FS Transportation Networks (ITNL) and its special purpose vehicles (SPVs) by Grant Thornton, shows gross financial mismanagement, withdrawal of funds from projects by ITNL leading to large cost overruns and accounting manipulation. The report found that road projects had to suffer Rs8,077 crore cost overrun, largely due to funds being taken out by ITNL. Interest cost overruns of Rs3,433.42 crore were one of the significant components of project cost overruns contributing 42% of the total project cost overruns. The mechanism of this is as follows: IL&FS initially advanced loans at 10% to the SPVs. These loans were later assigned to other lenders. The assignment resulted in effect where SPVs had borrowed funds from the new lenders and repaid the loans taken from ITNL. The SPVs were charged an interest rate of 14-16% on loans assigned by ITNL against the 10-12% charged by ITNL earlier. The interest was to be borne by the SPVs, resulting in a cost overrun of Rs3,433 crore.
The report on the forensic audit of IL&FS Transportation Networks (ITNL) and its special purpose vehicles (SPVs) by Grant Thornton reveals that the road projects had to face a Rs 8,077-crore cost overrun. This was largely due to funds being taken out by ITNL. The group's transport arm took out the money from the road projects by charging excess project development and project management fees (PDF & PMF) and using fee money to make equity contributions to these SPVs. ITNL also assigned loans it had advanced to these projects to other lenders at higher rates.
State-owned Indian Oil Corporation (IOC) is exploring the option to acquire IL&FS Paradip Refinery Water Ltd, the crisis-hit IL&FS has said in an affidavit filed before the insolvency appellate tribunal NCLAT. However, the Uday Kotak-led board has not shared any financial details while updating the tribunal on the progress of the groups resolution process.
Global investment firm KKR, through an affiliate entity, is set to acquire crisis-hit non-banking finance company Infrastructure Leasing & Financial Services' (IL&FS) stake in Bangalore Elevated Tollway Private Ltd (BETPL). Galaxy Investments, a wholly-owned subsidiary of KKR Asia Pacific Infrastructure Holdings, has entered definitive agreement with UK's development finance institution CDC's India Infrastructure Fund II to acquire a stake in the company.
Public Sector Punjab & Sind Bank (PSB) on Tuesday said it has declared bad asset IL&FS Tamil Nadu Power Company, with dues of over Rs 148 crore, as a fraud account and reported it to the Reserve Bank. As per the bank's policy on determination and disclosures on material events, PSB said it has declared this non-performing account as a fraud account. "It is informed that an NPA account, viz IL&FS Tamil Nadu Power Company Ltd with outstanding dues of Rs 148.86 crore has been declared as fraud and reported to RBI today as per regulatory requirement," the lender said in a regulatory filing.
IL&FS group is all set to resolve debt of Rs 55,000 crore by March, the board of the crisis-hit company has stated in its affidavit filed before the National Company Law Appellate Tribunal (NCLAT). While updating the progress of the resolution, the IL&FS board led by banker Uday Kotak said Rs 55,000 crore debt would be resolved through asset monetization, restructuring and initiatives pertaining to insolvency proceedings.
IL&FS Group will resolve debt of Rs 55,000 crore by March 2022, the board of the crisis-hit company has said in its affidavit filed before the National Company Law Appellate Tribunal (NCLAT). While updating the progress of the resolution progress, the IL&FS board, led by Uday Kotak, said Rs 55,000 crore debt would be resolved through asset monetisation, restructuring and insolvency proceeding initiatives. Some of this has already been completed while the rest is at different stages of resolution, it said in a brief snapshot on the progress made in the ongoing resolution process till December 7, 2021, and suggested estimates of progress to be made by March 2022.
IL&FS has filed a petition in the National Company Law Appellate Tribunal in Delhi seeking permission to distribute recovery proceeds to creditors. Last month, the board of the company had passed a resolution under which it proposed an interim distribution of Rs 16,200 crore (recovered by March 31,2022).
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 board of debt-ridden Infrastructure Leasing & Financial Services (IL&FS) has approved a proposal enabling interim distribution of proceeds to the extent of Rs 20,000 crore by March-end (2022) from the resolution of entities of the group. An affidavit has been filed with the National Company Law Appellate Tribunal (NCLAT) by the government to permit and approve the interim distribution mechanism. After this, the proceeds can be transferred to the creditors.