Edelweiss is top bidder for 3 IL&FS road assets

Mumbai: Edelweiss has emerged as the highest bidder for three road assets put on the block by IL&FS, the bankrupt infrastructure lender told bankers on Tuesday. The committee of creditors met on Tuesday to discuss bids for the three projects and issues relating to these projects, whether to sell them before converting to green.

Edelweiss submitted the bids through its infrastructure fund for three assets — the Jorabat Shillong Expressway with a debt of Rs 1,406 crore, the Jharkhand Infrastructure Implementation Co with a debt of Rs 430 crore, the Hazaribagh Ranchi Expressway Ltd with a debt of Rs 954 crore. Edelweiss did not respond to email. IL&FS declined to comment on the story.

Two of the three projects are amber companies and a resolution framework is not yet accepted for amber companies by the court. The IL&FS resolution framework, as worked out by the new management and board, has categorised its group units into green, amber and red, based on their ability to meet payment obligations over the coming 12 months.

Those able to meet all payment obligations are green. Those that can only operational payments and senior secured debt obligations are categorised as amber. Those unable to meet obligations to even senior secured financial creditors are categorised as red.

IL&FS has decided to sell nine projects through InVits. The five road assets that are up for sale have Rs 9,000-crore debt and for the remaining nine to be sold via Invits, the debt is Rs 11,000 crore. IL&FS has started discussion with lenders to float InVITs for assets that has received low or no bids. “The process to share proceeds is unclear as the framework is not approved,” said a lender. “IL&FS had tried to renegotiate with lenders to turn two amber road assets into green.” Jorabat restructuring required a 42 per cent haircut for lenders and UTI mutual fund declined to take the haircut and since the consensus was not formed it could not be converted into green. The investment towards equity will be small in case of the road assets and a large chunk is expected to go towards wiping off debt.

The new IL&FS board is hopeful of selling the road assets after having sold renewable energy assets earlier this year to Orix of Japan. The energy business fetched an equity value of Rs 593 crore and Orix assumed debt worth Rs 3,700 crore. The attempt to sell the securities and education businesses has not yet been effective. The board is considering Swiss challenge process for sale of technology, environment and BPO assets. It expects recovery of Rs 3,000 crore to Rs 3,500 crore through the sale of real estate assets including the IL&FS headquarters.