InvestorQ : Can you tell me about the proposed INVIT structure that IL&FS will use to repay some of its creditors?
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Can you tell me about the proposed INVIT structure that IL&FS will use to repay some of its creditors?

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Deepa Salunkhe answered.
4 weeks ago
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The plan is all set to convert the debt related to road projects into an INVIT and issue units against them. Here are the highlights.

· IL&FS, which ran into a default in 2018, is all set to launch its Infrastructure Investment Trust or INVIT in the Indian market.

· This INVIT will effectively convert all the outstanding debt on a total of 10 road projects into units of the INVIT, and then pass-through-units will be issued to lenders.

· The IL&FS board under the leadership of Uday Kotak has got all necessary approvals and has also got the registration certificate from SEBI.

· The INVIT plan will resolve a total of Rs.13,000 crore of debt that banks had given to IL&FS out of the total Rs.100,000 crore that it owed at the time of bankruptcy.

· The pass-through units of the INVIT will be distributed by IL&FS to lenders including SBI, PNB, Canara Bank, Bank of Baroda and Indian Overseas Bank which had lent to IL&FS.

· This INVIT structure is part of the Rs.32,000 crore debt resolution that IL&FS had promised in the previous week as part of their resolution plan.

· By Mar-2022, the company effectively plans to resolve loans to the tune of Rs.56,000 crore, including this INVIT plan.

· Lending banks will get INVIT units against their loans giving them share in cash flows from underlying infrastructure projects structured as fixed return instruments.

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