Alvarez and Marsal and grant Thornton Advising IL&FS on bank-wise distribution of realization proceeds. IL&FS last week informed lenders that the proceeds would be disbursed in the third quarter, while it was initially planned in the second quarter, said one of the persons cited above.
Out of ₹16,361 crore, ₹11,296 crore will be disbursed as cash payments to lenders and ₹5,065 crore will be given as units of an infrastructure investment trust (InvIT).
National Company Law Appellate Tribunal (NCLAT), which is overseeing the IL&FS resolution, had on May 31 approved the distribution of recoveries among lenders.
Confirming the development, an IL&FS spokesperson said that “the interim disbursement will result in funds being made available to the creditors of the group which include banks, financial institutions, pension funds, provident funds, employees welfare funds, insurance funds, gratuity funds, Superannuation Fund and Army Group Insurance Fund among others.”
He further said that the board expects an interim disbursement within the current financial year, subject to certain conditions.
The financial position of the lenders will get a boost
“These criteria are related to verification of claims or in some cases pending litigation,” said a third person.
The lenders of IL&FS have sought disbursement of the money as it will help them to increase their income. Most of the banks have fully provisioned for the troubled SPVs of IL&FS, and thus the proceeds from the recovery will be reflected in their financial position.
When IL&FS collapsed in October 2018, it had 347 companies with a total debt of Rs 94,246 crore. IL&FS had indicated that out of this amount, an estimated Rs 61,000 crore of debt would be recovered over the next few years. According to an application filed by the finance company, the finance company has resolved 191 group entities by way of sale, liquidation closure or transfer to InvIT, resulting in cash recovery of Rs 16,742 crore as on December 7, 2021. Appellate Authority.
IL&FS aims to fulfill the resolution of 249 companies, the same application said.