IL&FS to Restart Stake Sale of ITPCL
ECONOMY & POLICY

IL&FS to Restart Stake Sale of ITPCL

The Infrastructure Leasing & Financial Services (IL&FS) group will restart the process of selling its stake in the 2,000-megawatt (MW) ITPCL (IL&FS Tamil Nadu Power Company) power plant in Tamil Nadu, alongside its ongoing efforts to restructure the debt of the company. The new IL&FS board is in the process of finalizing a financial transaction advisor to facilitate the stake sale process.

ITPCL is currently restructuring its debt under the prudential framework for resolution of stressed assets guidelines of the Reserve Bank of India (RBI) issued on June 7, 2019. The company has obtained a CRISIL RP-4 rating, with sustainable debt amounting to ₹4,250 crore. The restructuring plan involves segregating the debt into sustainable and unsustainable categories to ensure the viability of the company.

The IL&FS board had filed an application with the National Company Law Tribunal (NCLT) on January 8, 2021, seeking reliefs for implementing the ITPCL restructuring plan. However, the NCLT approved some demands but declined others and asked ITPCL to consider the claims of all operational and capital expenditure creditors.

Under the revised plan, 33.16% of admitted claims will be provided to implement the restructuring plan. The operational creditors with finalized settlements are offered 33.16% of their admitted claims over a five-year period upon implementing the ITPCL restructuring plan. Also, for creditors with conditional settlements 33.16% of their admitted claims are proposed to be paid.

Punjab National Bank, Bank of Baroda, LIC, SBM Bank, State Bank of India (SBI), Union Bank of India, and Power Finance Corporation Limited are creditors to ITPCL.

Earlier, the sustainable debt portion under the restructuring plan ensured 59% recovery for secured consortium lenders. Other financial creditors were to get 30% recovery while operational & capex creditors were offered 15% recovery. Five capex creditors including China Datang Technologies, Coastal Marine construction, Sepco III Electric Power, and Shandong Tiejun Electric submitted claims of ₹608 crore.

The NCLT in its order dated July 4, 2022, had observed that “operational creditors/capex creditors have to be appropriately considered in a fair and reasonable resolution plan” and asked the board to file a supplementary restructuring plan in addition to the debt restructuring plan dealing with claims of operational creditors or capex creditors.

The stake sale process is expected to be completed by the end of the current financial year. The proceeds from the stake sale will be used to repay debt and fund the company's operations.

See also:
NCLAT dismisses HDFC's appeal against sale of IL&FS BKC property
IL&FS obtains NCLT clearance to sell its headquarters to Brookfield


The Infrastructure Leasing & Financial Services (IL&FS) group will restart the process of selling its stake in the 2,000-megawatt (MW) ITPCL (IL&FS Tamil Nadu Power Company) power plant in Tamil Nadu, alongside its ongoing efforts to restructure the debt of the company. The new IL&FS board is in the process of finalizing a financial transaction advisor to facilitate the stake sale process. ITPCL is currently restructuring its debt under the prudential framework for resolution of stressed assets guidelines of the Reserve Bank of India (RBI) issued on June 7, 2019. The company has obtained a CRISIL RP-4 rating, with sustainable debt amounting to ₹4,250 crore. The restructuring plan involves segregating the debt into sustainable and unsustainable categories to ensure the viability of the company. The IL&FS board had filed an application with the National Company Law Tribunal (NCLT) on January 8, 2021, seeking reliefs for implementing the ITPCL restructuring plan. However, the NCLT approved some demands but declined others and asked ITPCL to consider the claims of all operational and capital expenditure creditors. Under the revised plan, 33.16% of admitted claims will be provided to implement the restructuring plan. The operational creditors with finalized settlements are offered 33.16% of their admitted claims over a five-year period upon implementing the ITPCL restructuring plan. Also, for creditors with conditional settlements 33.16% of their admitted claims are proposed to be paid. Punjab National Bank, Bank of Baroda, LIC, SBM Bank, State Bank of India (SBI), Union Bank of India, and Power Finance Corporation Limited are creditors to ITPCL. Earlier, the sustainable debt portion under the restructuring plan ensured 59% recovery for secured consortium lenders. Other financial creditors were to get 30% recovery while operational & capex creditors were offered 15% recovery. Five capex creditors including China Datang Technologies, Coastal Marine construction, Sepco III Electric Power, and Shandong Tiejun Electric submitted claims of ₹608 crore. The NCLT in its order dated July 4, 2022, had observed that “operational creditors/capex creditors have to be appropriately considered in a fair and reasonable resolution plan” and asked the board to file a supplementary restructuring plan in addition to the debt restructuring plan dealing with claims of operational creditors or capex creditors. The stake sale process is expected to be completed by the end of the current financial year. The proceeds from the stake sale will be used to repay debt and fund the company's operations. See also: NCLAT dismisses HDFC's appeal against sale of IL&FS BKC propertyIL&FS obtains NCLT clearance to sell its headquarters to Brookfield

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