Il&Fs head office in Bkc sold to Brookfield for Rs 1,080 Crore

The managing director of crisis-hit Infrastructure Leasing & Financial Services Limited, CS Rajan, said on Tuesday that the company had resolved Rs 55,000 crore of overall debt by March 31, 2022. This represents 90% of the debt resolution estimated at Rs 61,000 crore.

“Total debt was Rs 99,355 crore spread across 347 entities when the new board took over in October 2018,” Rajan said. “The overall estimated debt we aim to resolve amounts to Rs 61,000 crore or 62% of the 2018 debt.” Rajan said 246 entities out of 347 were resolved, including claims filed with the courts.

The MD said Rs 21,000 crore of debt was discharged through monetization of assets. As part of the asset monetization, “IL&FS head office at BKC, or Bandra Kurla Complex, Mumbai, has been sold to Brookfield for Rs 1,080 crore,” Rajan said. He said the letter of intent had been delivered to Brookfield and the TIFC building would be handed over to Brookfield in 2022.

IL&FS had been looking to monetize The IL&FS Financial Center (TIFC Building) for some time. In an earlier statement, the company said, “TIFC with a built-up area of ​​322,268 square feet, of which 300,624 square feet is owned by IL&FS. The portion owned by IL&FS is available for sale on an as is basis. Some reports had then claimed that IL&FS expected to raise Rs 1,500 crore from the sale of the BKC head office. The 10-story office building was one of the first blocks to be built at BKC.

Uday Kotak, who completes his term as chairman of IL&FS on April 2, said: “Our first job as a new board was the need to protect national assets in the broader public interest. group resolution is absent even today in the Indian legal system. We have seen many conglomerates go through resolutions without group resolution and be able to recover in single digit percentages.”

Kotak said Rajan will be the new president and CEO of IL&FS effective April 3. He said the government, particularly the Ministry of Commercial Affairs, has helped the council navigate IL&FS. “We had nearly two full board meetings each month,” Kotak said. “The hardest thing for me was applying for the sale of IL&FS head office in Brookfield on March 25; it was one of the first structures to come into existence in BKC, Mumbai.”

Kotak said the estimate is that, overall, Rs 61,000 crore of the total debt is recoverable over time. “We have a good chance of doing better than the recovery of Rs 61,000 cr. Rs 21,000 crore of money has already been paid to creditors so far and we are sitting with Rs 20,000 crore of money that we have to give to creditors at several levels. Rs 55,000 cr of debt has been resolved to date.”

“The biggest lesson from this experience for me as a banker,” Kotak said, “is don’t lend where you don’t understand the structure of the business.”

He said banks need to do their own due diligence, not rely on rating agencies etc.

He said the company wanted to resolve another debt of Rs 6,000 crore by 2023. Rajan said the company was facing difficulties with non-payment of receivables, delaying court deadlines. “Long approval processes at each creditor added to the delays,” he said.

First post: STI


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