The IL&FS Group on Wednesday completed the sale of a 73.69% stake in its education business, held under Schoolnet India (SIL), to Falafal Technologies (FTPL).
The transaction provides positive equity value to IL&FS and resolves nearly Rs 650 crore of consolidated fund-based and non-fund based financial debt, without any haircut to lenders, the company said.
The sale was completed pursuant to the approval granted by the National Company Law Tribunal’s principal bench through its order dated August 31. FTPL has paid Rs 7.37 crore as equity value for the shares of SIL held by IL&FS and IL&FS Employee Welfare Trust, in addition to taking over SIL’s fund-based and non-fund based financial debt of nearly Rs 650 crore. FTPL has also agreed to a deferred consideration of Rs 6.29 crore payable within 18 months from closure.
Sale of SIL will reduce operating cost for IL&FS Group by nearly 19%. SIL holds an 80% stake in IL&FS Skill Development Corporation (ISDC) and also has two wholly owned subsidiaries — IL&FS Cluster Development Initiative (ICDI) and Skill Training Assessment Management Partners (STAMP).
As part of the sale transaction, the businesses of ICDI and STAMP have also been transferred to SIL through a slump sale for a consideration of Rs 1 for each company. Transfer of debt of nearly Rs 27 crore in ICDI and STAMP forms part of the slump sale. Further, the shares of ICDI and STAMP have been transferred to IL&FS. SIL will continue to retain 80.01% stake in ISDC, which will become a step down subsidiary of FTPL.
“This development represents another key milestone in the overall resolution for the IL&FS Group under the new board. As part of the overall resolution plan to address a significant portion of the Group’s debt, the sale of a number of other Group assets has been initiated which is currently in various stages of progress,” the company said in a statement.
Earlier in July, the IL&FS board, led by Uday Kotak, had revised the quantum of debt it expects to resolve to Rs 57,000 crore, more than half the total debt of Rs 99,000 crore. Of this, Rs 50,500 crore will be addressed by March 2021, the board had said while revised the debt estimates to Rs 99,000 crore.
The company had said among the modes adopted for resolution of debt, 61 entities with a debt of Rs 278 crore have been identified for winding up, while 11 road projects with a debt of Rs 6,035 crore have been identified for termination.
Further, the debt restructuring process is currently on in case of three group companies with a debt of Rs 9,382 crore and real estate monetisation for eight entities with a Rs 473-crore debt will also be undertaken.