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Sunday, July 21, 2024

IL&FS may sell some road assets as transferring them to an InvIT faces obstacles

The IL&FS group is considering the sale of some of its road assets due to challenges in transferring them to an infrastructure investment trust (InvIT), as originally planned.

IL&FS had initially intended to transfer approximately a dozen road assets to the Roadstar Infra Investment Trust (RIIT). While five of these assets have already been successfully transferred, the transfer of another five has encountered delays due to legal challenges from lenders and other issues. The transfer of one asset is making progress, while IL&FS has excluded one asset from the transfer process.

To overcome these challenges, the IL&FS board is exploring alternative methods to monetize these assets while still aiming to raise ₹61,000 crore as part of the group’s debt resolution program.

Additionally, IL&FS has decided to list RIIT, which has acquired five assets from IL&FS Transportation Networks. The assets transferred to RIIT include Moradabad Bareilly Expressway, Sikar Bikaner Highway, Hazaribagh Ranchi Expressway, Thiruvananthapuram Road Development Company, and Pune Sholapur Road Development Company.

An IL&FS spokesperson stated, “The IL&FS board has decided to go ahead with listing the Roadstar Infra Investment Trust … RIIT is also in the process of acquiring one more asset, subject to requisite approvals.”

The National Company Law Tribunal (NCLT) approved IL&FS’ plan to transfer its Phase 1 special purpose vehicles (SPVs) on September 15, 2021, and Phase 2 SPVs on October 14, 2022. However, only five out of the SPVs have been successfully transferred to the InvIT.

Regarding other assets, IL&FS has chosen to exclude the East Hyderabad Expressway from the transfer to the InvIT due to delays and the expiration of its concessions in December 2022. For assets facing disputes with their lenders, such as Barwa Adda Expressway and Baleshwar Kharagpur Expressway, IL&FS is exploring alternative resolution mechanisms to address the debt restructuring delays.

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