IL&FS has repaid the bulk of its debt of more than 99 thousand crores.
Finance company Infrastructure Leasing and Financial Services (IL&FS) has settled Repay Debts worth Rs 43,000 crore. Also, the Debt Recovery Target has been increased by Rs 5000 crores for the financial year 2021-22.
IL&FS said that so far it has settled 44 per cent of the total debt. The company was sunk in 2018. At that time it had a debt of 91,000 crores. It started as a road construction financing company. After this, the company started expanding. Soon the company became 347 subsidiary companies. When the company started defaulting payments, there was chaos in the financial market. The company has to pay around Rs 13,559 crore for the short term and Rs 65,293 crore for the long term. Apart from this, interest on debt is included along with other loans. In this, a loan of 60 thousand crore rupees is associated with road, electricity and water projects.
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IL&FS had taken loan more than income The finance company took a lot of short-term debt repayment. The company proved to be unsuccessful in returning the loan due to excess income. The company started defaulting payments. IL&FS and its subsidiaries delayed the repayment of debt due to the cash crisis. The company is associated with many government projects and has given most of its debt to government companies as well. After the sinking of the company, the Center started the company’s resolution process last year and entrusted its responsibility to Uday Kotak by forming a new board. Since October 2018, out of 347 companies of the company, 186 have been resolved and 161 are in different stages of resolution.
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Company to launch Road Infrastructure Investment Trust
IL&FS is going to launch its Road Infrastructure Investment Trust (InvIT). Under this trust, IL&FS will convert loans worth crores of rupees taken from banks in 10 road projects into trust units and give them to banks. Sources said that IL&FS has received all the regulatory approvals to launch the Infrastructure Investment Trust. The creditors of the company (Committee of Creditors) have also agreed to this.