INSUBCONTINENT EXCLUSIVE:
on repayments prevents lenders from using funds generated by firm, discouraging banks from giving more working capital to unit.
With no
access to funds even from good assets that are generating cash flows, current strategy of ILFS management to put in place a moratorium on
funds deposited by operating companies runs risk of even cash generators turning into stressed assets.
ILFS has written to its trusteeship
loans, ILFS group companies and special purpose vehicles (SPV) are opting to not pay lenders despite some operating units generating cash
flows.
The court allowed a moratorium until further orders
The matter will come up for hearing on January 28
The view taken by company is that moratorium is for entire debt of Rs 91,000 crore.
To be sure, ILFS Tamil Nadu Power Plant could default on
its payment commitments as state government has delayed settlement of Rs 650 crore because of emergency arrangements toward relief and
platform for implementation of thermal power project at Cuddalore in Tamil Nadu.
Of cumulative capacity, phase I of 1,200 MW project has
commenced commercial operations
executive said that dues to vendors and service providers at Tamil Nadu plant amount to Rs 8 crore
The plant has won a 500 MW power supply deal with TN government in an auction bid on Power Exchange, and this has to be realised by end of
that companies should take directions from court on structuring payments, taking a holistic approach on debt repayment.
Lenders, meanwhile,
have expressed their concerns about making extra provisions by last quarter on loans classified as nonperforming due to their ILFS
maintaining structured payments
Last week, Crisil downgraded Jharkhand Road Projects Implementation Company from AA to BB.
