Debt Rejig: SBI desires IL&FS to declare ITPCL worth earlier than debt rejig

Mumbai: State Financial institution of India (SBI), the nation’s largest mass lender, and IL&FS appear to have completely different views on debt restructuring on the bankrupt financier’s energy three way partnership entity – ITPCL.

SBI desires an evaluation of the liquidation worth even because the restructuring of ITPCL’s ‘9,000-crore debt was authorized by nearly all of ITPCL collectors. SBI, a minority proprietor of debt, is looking for liquidation worth earlier than signing on the proposal.

“SBI desires IL&FS to reach on the liquidation worth of ITPCL, because it has not agreed to the restructuring of ITPCL debt,” a banking supply mentioned. “It has not obtained something as a part of the debt servicing obligation undertaken by ITPCL as on September 30, 2023, because of the dissent.”

IL&FS, as a part of its decision framework, shouldn’t be obligated to hold out a liquidation evaluation for this asset because the proposal authorized by lenders, led by PNB, is of restructuring of debt and never of sale.

A spokesperson at SBI didn’t reply to a request for remark.

“IL&FS, as a part of its authorized decision framework, shouldn’t be obligated to undertake liquidation worth evaluation in case of restructuring of ITPCL debt,” mentioned an IL&FS spokesperson.

Final month, greater than half a dozen lenders led by Punjab Nationwide Financial institution authorized a restructuring plan for the corporate reaching the minimal requirement of 66% lenders by worth. Nevertheless, lenders haven’t bought any formal communication from SBI indicating its dissent or consent to approve restructuring of debt, the supply mentioned.

Beneath the plan, 59% of ITPCL’s debt, which is ‘5,310 crore, has been categorized as sustainable. A portion of this will likely be transformed into time period loans with a compensation schedule extending till March 2038, together with an upfront cost of 35%.

The remaining sustainable debt has been categorised as funded curiosity time period loans (FITLs) with upfront funds starting from 25% to 70% this yr, and repayments scheduled as much as March 2038. These upfront funds will likely be sourced from the money reserves inside the firm.

The remaining 41% of unsustainable debt, amounting to ‘3,690 crore, will likely be transformed into non-convertible debentures bearing a coupon fee of 0.01%, with funds due in March 2040.

ITPCL is a particular function car established by IL&FS and operates a 3,180-MW coal-based thermal energy plant in Cuddalore, Tamil Nadu. At the moment, the corporate is working a 1,200-MW (2×600 MW) energy plant, and if the restructuring is efficiently resolved, it is going to mark one of many largest accounts to be resolved because the monetary and infrastructure firm confronted insolvency in September 2018.

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