Lenders Approve IL&FS Debt Recast Proposal for CNTL

Lenders have approved IL&FS Group’s proposal to restructure the Rs 5,500 crore debt of its subsidiary Chenani Nashri Tunnelway (CNTL), which offers them almost full repayment.

The move comes after the company revalued to Rs 5,257 crore now after the collapse of the deal with Singapore’s Cube Highways last year, due to regulatory delays, for a consideration of Rs 3,900 crore.

The three-day vote opened on March 21 and saw lenders favor debt overhaul as it offers them 99% of their money while unsecured lenders will get 90% back.

The new proposal values ​​the company at Rs 5,257 crore and will deal with Rs 4,910 crore of IL&FS group debt. A spokesperson for IL&FS confirmed the development, saying we have obtained the required approvals from lenders to restructure CNTL’s debt.

The proposal involves CNTL transforming into a green entity, with secured and unsecured lenders getting more than 99% and 90% of the principal amount, respectively, upon implementing the new proposal, a company official said. aware of the development. PTI.

CNTL is a wholly owned subsidiary of ITNL (an IL&FS company) which, together with its agents, owns 100% of the capital. It has been classified as an orange company, which will now experience a change in status.

Lenders will receive an upfront payment of around Rs 1,700 crore in principal (they have already debited Rs 670 from the escrow account), in addition to accrued interest from April 2021, providing an advantage of around Rs 370 crore on the stake implemented.

CNTL continues to maintain and operate J&K’s longest tunnel and receives an annuity of Rs 635 crore per annum, which is received on time.

CNTL’s lenders, at their last meeting, had unanimously approved Crisil and Icra as rating agencies, SVKM as forensic auditor and considered the RBSA appraisal report as the next step for complete the process, which also involves the appointment of another appraiser as present value determined by the expert appointed by the company.

The CNTL consortium of lenders includes State Bank of India, Jammu & Kashmir Bank, Punjab & Sind Bank, Canara Bank, Punjab National Bank, Uco Bank and Edelweiss ARC, among others.

The recovery in the restructured debt proposal is much higher for all lenders compared to the assignment proposal in which Cube Highways became the highest bidder offering Rs 3,900 crore.

CNTL, which owes just over Rs 5,500 crore to lenders, had reached a share sale agreement with Singaporean infra major Cube Highways & Infrastructure in August 2020 for Rs 3,900 crore, but the same expired in August 2021 following which management appointed an external appraiser who set a much higher valuation of Rs 5,257 crore.

The Chenani-Nashri tunnel project is part of the ambitious 286 km four-lane development of the Jammu-Srinagar National Highway to create all-weather connectivity.

The project will reduce the distance between Jammu and Srinagar by 31 km. It was launched at a price of Rs 5,269 crore in March 2017 with a concession period till March 2032.

As of October 2021, ILFS Group had resolved Rs 52,200 crore of its Rs 99,000 crore of fund-based and non-fund-based debts when it went bankrupt in October 2018, spread across 347 group companies, including 172 offshore entities.

Posted: Sunday, March 27, 2022, 9:31 PM IST

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