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

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.