INSUBCONTINENT EXCLUSIVE:
LT Finance is challenging in the apex court a bankruptcy appeals bench ruling that allowed Rs 16,000 crore of ILFS debt to be categorised as
LT Finance has Rs 1,800 crore of debt exposure to six special purpose vehicles (SPV) of ILFS
cash flow remain as going concerns and that their operations are not disrupted
Money from escrow accounts of SPVs will remain in individual accounts after meeting the operational expenses.
However, all companies of the
group that fail to meet cash flow solvency test will remain under the moratorium granted by NCLAT
Approximately, the amount of loan that will fall under the Amber category is Rs 16,000 crore
appeal before the apex court.
LT Finance has exposure to six road SPVs and all of them are operational
Out of these six, four are annuity projects, where money comes directly from the government: Two are toll projects.
According to the ILFS
resolution framework report, green, amber and red are categories of companies based on their ability to meet payment obligations over the
coming 12 months.
Companies that are able to pay all obligations have been categorised as green, companies only able to meet operational
payments and senior secured debt obligations are categorised as amber and those that are unable to meet obligations to even senior secured
financial creditors are categorised as red
According to the plan, ILFS can service up to of Rs 7,000 crore immediately.
The plan has assured that the seniority of SPV project lenders
will be maintained during asset monetisation and these project lenders will get priority in kilter with the repayment waterfall mandated in
The relevant section of the law says that senior secured creditor loans are cleared first and any surplus that remains thereafter is given
to unsecured or subordinated creditors, and thereafter to the equity owners.
