IL&FS Gets Government Approval For Rs 2,700 Crore Claims Towards Stuck Road Projects
SEBI started a fraud investigation after the IL&FS crisis came to light last year, following defaults by group companies, which together have over Rs 90,000 crore in debt. (Photo: IL&FS Annual Report)

IL&FS Gets Government Approval For Rs 2,700 Crore Claims Towards Stuck Road Projects

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Crisis-hit Infrastructure Leasing & Financial Services Group has received approvals from various government authorities for claims worth about Rs 2,700 crore towards stuck or incomplete road projects, officials said.

The National Highway Authority of India Conciliation Committee recently approved a claim for approximately Rs 707 crore for the ILFS-Fagne Songadh Expressway Limited project (in Gujarat-Maharashtra border area), while the committee had earlier approved claims of Rs 902 crore for the Khed Sinnar Expressway project (in Maharashtra).

Other projects for which claims have been approved include Kiratpur Ner Chowk Expressway Limited for Rs 672 crore (in Himachal Pradesh) and Jorbat Shillong Expressway Limited for Rs 252 crore (Meghalaya). Additionally, the Ministry of Road, Transport and Highways had cleared claims of ITNL Road Infrastructure Development Company Ltd. for Rs 144 crore.

In the case of both Jorbat Shillong and IRIDCL projects, the settlement agreements have been duly signed with authorities, officials said. When contacted, an IL&FS spokesperson declined to comment. In October 2018, the government had seized control of the debt-trapped company and superseded its board by appointing a new one, led by eminent banker Uday Kotak as its chairman.

The new board, as part of the overall resolution process for the IL&FS Group, has sold a number of assets to clear dues and debt. Officials said these initiatives of engaging with various authorities such as the Ministry, NHAI and NHIDCL for settlement of claims relating to incomplete and terminated projects and for compensation claims filed in respect of certain operational projects, is part of the new board's resolution process.

Also read: IL&FS Case: NCLAT To Provide Formula For Distribution Of Proceeds Among Creditors

The ministry in March 2019 had formulated guidelines for resolution of stuck projects (mainly incomplete projects) and provided parameters for authorities to foreclose the concession agreement and pay compensation being the lower of value of work done and 90 percent of debt due.

Cash-strapped IL&FS in December reported a standalone net loss of Rs 22,527 crore for the fiscal ended March 2019. It reported revenue of Rs 824 crore, massively down from Rs 1,734 crore in the previous year. This was the first earnings announcement after the government sacked its board in October last year.

As of March 31, 2019, total assets stood at Rs 4,148 crore, a pale shadow of Rs 23,868 crore year-ago, while its liabilities rose to Rs 21,083 crore from Rs 18,276 crore in the previous fiscal. The company had said at that time that the board gas adopted prudent provisioning on loans/impairment for investments, besides taking a conservative view on fair market value and recovery estimates. As of Oct. 8, 2018, the group has an external fund based debt of Rs 94,216 crore and an additional non-fund based debt of Rs 5,139 crore.

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