Debt-Laden IL&FS Puts Road Assets On The Block

The final transaction for sale of assets can be implemented only after it gets approved by the NCLT.

IL&FS’s new board has put its road assets on sale.

(Photo Courtesy: BloombergQuint)

The new board of the insolvent Infrastructure Leasing & Financial Services Ltd. has put its road assets on sale as part of its debt-resolution plan.

The road assets/businesses, according to a company statement, are classified under the “Domestic Roads Vertical”, and belong to subsidiaries, including IL&FS Transportation Networks Ltd. They comprise:

• Seven operating annuity-based road projects in various parts of India aggregating approximately 1,774 lane kilometres.
• Eight operating toll-based road projects across India aggregating around 6,572 lane km.
• Four under construction road projects in various parts of India aggregating around 1,736 lane km upon completion.
• Three other assets—the EPC (engineering, procurement and construction) and O&M (operation and maintenance) businesses of IL&FS Transportation Networks Ltd. and a sports complex in Thiruvananthapuram, Kerala.

The infrastructure financier, in order to ensure maximisation of sale value, may either sell these assets together or individually, depending upon investors’ interest. The company had put its renewable energy assets on the block on 28 November, after it received over a dozen offers for its two companies—IL&FS Securities Services and ISSL Settlement & Transaction Services.

The stake sales are part of the revival plan of the new board—headed by billionaire banker Uday Kotak—that was approved by the insolvency court on 31 October.

The government took control of the troubled infrastructure group after multiple defaults to prevent a contagion in India’s financial markets. IL&FS and its 347 subsidiaries and associate companies have a debt of about Rs 91,000 crore.

The final transaction for sale of assets, and the resulting resolution plan can be implemented only after it gets approved by the National Company Law Tribunal.

The IL&FS asset sale will be managed by Arpwood Capital and JM Financial—appointed as financial and transaction advisers—along with Alvarez & Marsal, the resolution consultant.

The statement said the stake sale would help the board in developing a turnaround plan for the group, which would be done through asset divestment or a combination of revival plans submitted to the NCLT.

(This story was first published in BloomberQuint)