Lenders Approve IL&FS Debt Consolidation Proposal for Chenani Nashri Tunnel

Lenders have backed IL&FS Group’s proposal to rebuild the Rs 5,500 crore debt of its subsidiary Chenani Nashri Tunnelway (CNTL), which offers them virtually full repayment. The move comes after the organization revalued to Rs 5,257 crore now after deal with Singapore’s Cube Highways fell through last year, due to regulatory delays, for a thought of Rs 3,900 crore . The three-day vote opened on March 21 and saw lenders favor the redesigned bond as it offers them almost 100% of their money while unstable lenders will get 90% back. The new proposal values ​​the organization at Rs 5,257 crore and will address Rs 4,910 crore of IL&FS group debt.

The proposal involves CNTL transforming into a green entity, with secured and unsecured lenders getting more than 99% and 90% of the principal amount, respectively, when implementing the new proposal, an official at PTI told PTI. the company aware of the development. .

A spokesperson for IL&FS confirmed the development, saying we have obtained the required approvals from lenders to restructure CNTL’s debt.

CNTL is a wholly owned subsidiary of ITNL (an IL&FS company) which, together with its agents, owns 100% of the capital. It has been classified as an orange company, which will now experience a change in status.

CNTL continues to maintain and operate J&K’s longest tunnel and receives an annuity of Rs 635 crore per annum which is received on time.

Lenders will receive an upfront payment of around Rs 1,700 crore in principal (they have already debited Rs 670 from the escrow account), in addition to accrued interest from April 2021, providing an advantage of around Rs 370 crore on the stake implemented.

CNTL’s lenders, at their last meeting, had unanimously approved Crisil and Icra as rating agencies, SVKM as forensic auditor and considered the RBSA appraisal report as the next step for complete the process, which also involves the appointment of another appraiser as present value determined by the expert appointed by the company.

The CNTL consortium of lenders includes State Bank of India, Jammu & Kashmir Bank, Punjab & Sind Bank, Canara Bank, Punjab National Bank, Uco Bank and Edelweiss ARC, among others.

The recovery in the restructured debt proposal is much higher for all lenders compared to the assignment proposal in which Cube Highways became the highest bidder offering Rs 3,900 crore. CNTL, which owes just over Rs 5,500 crore to lenders, had reached a share sale agreement with Singaporean infra major Cube Highways & Infrastructure in August 2020 for Rs 3,900 crore, but the same expired in August 2021 following which management appointed an external appraiser who set a much higher valuation of Rs 5,257 crore.

The Chenani-Nashri tunnel project is part of the ambitious 286 km four-lane development of the Jammu-Srinagar National Highway to create all-weather connectivity. The project will reduce the distance between Jammu and Srinagar by 31 km. It was launched at a price of Rs 5,269 crore in March 2017 with a concession period till March 2032. and not fund-based. when it went bankrupt in October 2018, spread across 347 group companies, including 172 offshore entities.

Summary of news:

  • Lenders Approve IL&FS Debt Consolidation Proposal for Chenani Nashri Tunnel
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