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IL&FS New Board To Give Rs 16,361 Crore To Creditors

IL&FS’ new board to provide Rs 16,361 crore to collectors on NCLAT’s route

New Delhi:

The National Company Law Appellate Tribunal (NCLAT) has directed the brand new board of the debt-ridden IL&FS Group to distribute Rs 16,361 crore of money and InvIT models out there throughout the Group to its collectors on pro-rata foundation.

The interim distribution award of Rs 16,361 crore contains Rs 11,296 crore in money and Rs 5,065 crore in InvIT models (Infrastructure Investment Trusts) and a majority of that is to be distributed to the collectors of three massive group companies – IL&FS, IFIN and ITNL.

“The interim distribution shall be confined only to the entities as reflected in Annexure-6 except those excluded and for the amount of Rs 16,361 crores i.e Rs 11,296 crore of cash and Rs 5,065 crores of InvIT Units,” mentioned an order by a two-member NCLAT bench headed by Chairperson Justice Ashok Bhushan.

With regard to interim distribution, NCLAT mentioned it “shall be implemented only after approval by the new board” and “shall take place as pro rata basis”.

The Appellate tribunal has additionally directed IL&FS to finish the decision course of by finish of this month and has directed to record the matter on July 19, 2022 for subsequent listening to.

“We are of the view that IL&FS and its entities may take all steps to complete the resolution process as per the resolution framework and submit their Application for approval before the NCLT by 30.06.2022,” NCLAT mentioned in an order dated May 31, 2022.

Further, NCLAT mentioned the interim distribution “shall abide by final resolution of the IL&FS entities as per resolution framework” and the collectors shall be requested to provide “undertaking to refund the excess amount, if any, pursuant to the final resolution”.

Meanwhile, resulting from opposition from collectors it has additionally directed to maintain 4 firms out of this distribution course of.

The firms are – IL&FS Transportation Networks, Rapid Metro Rail Gurgaon South, Rapid Metro Rail Gurgaon and IL&FS Wind Energy.

According to IL&FS spokesperson, over 75 per cent of this cash might be distributed to collectors of three massive holding firms – IL&FS, IFIN and ITNL – which have a big base of public fund collectors as per the decision framework and underlying distribution formulae.

IL&FS had availed general debt of Rs 99,000 crore from a number of sources – together with non-public and PSU banks and public funds – largely in 4 holding firms – IL&FS, ITNL, IFIN and IEDCL.

These loans, offered by banks and public funds in holding firms, had been additional prolonged as unsecured and subordinated loans to underlying firms throughout the group.

As per the IL&FS decision framework, the holding firms can’t obtain any funds from decision proceeds until the underlying firms get absolutely and at last resolved.

As a consequence, collectors together with public funds on the holding firm stage acquired locked and had been unable to get any decision proceeds until the ultimate decision of all downstream firms had been absolutely resolved.

Earlier, in March IL&FS has mentioned it has addressed debt decision of Rs 55,000 crore, or almost 55 per cent of the debt, after the group grew to become a defaulter, and the federal government outmoded its board in October 2018. 

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