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As a part of its resolution process, debt-ridden IL&FS has signed binding term-sheet agreements with secured lenders of three entities.
Term sheets are documents frequently used by lenders to outline the terms of a potential financing.
The three entities are Moradabad Bareilly Expressway Ltd (MBEL), Jharkhand Road Projects and West Gujarat Expressway Ltd.
The total debt was estimated to be around ₹5,071 crore — ₹3,242 crore from secured lenders and ₹1,829 crore from unsecured creditors.
Further, the secured lenders of all the three projects have approved the revised proposal for these entities, which includes certain concessions and modification of terms of financial debt availed by the entities from lenders.
These include the release of cash flow from existing accounts to service financial and operational creditors; reduction in debt service coverage ratio requirement; the utilisation of surplus cash (above debt-service coverage ratio requirement); preference to secured lenders over unsecured lenders in case of shortfall; and a revision in interest rate charged to the entity.
‘Red’ entities
Further, in an NCLAT order, IL&FS has been allowed two weeks to state the next course of action with regard to 55 entities that have been put under the ‘red’ category. The order also has asked IL&FS to specifically state as to whether any one ‘red’ entities can be termed as ‘amber’or ‘green’.
If it is not possible, the company will inform the steps required to be taken for the other red entities, the NCLAT order stated.
Red, amber and green categories indicate the status of the subsidiary companies in terms of the ongoing debt resolution process. These developments come after the deadline for claims management process was extended from June 5 to June 20.
Gift City buildings
In a related development, IL&FS has invited Expressions of Interest for the sale of commercial office space in two buildings at the Gujarat International Finance Tec City (Gift City).
Both the buildings, with a total of 9,600 sq m of office space, are developed by Sabarmati Capital One Ltd (SCOL) and Sabarmati Capital Two Ltd (SCTL), which are wholly owned subsidiaries of IL&FS Township & Urban Assets Ltd (an IL&FS Ltd unit).
GIFTCL has executed a 99-year lease deed, starting June 7, 2013, for the land in favour of SCOL and SCTL. GIFTCL had granted development permission for a built-up area of around 6,00,000 sq ft each to SCOL and SCTL.
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