NCLT Consents To Rs.6,000 Crore Sale Of Chennai Nashri Tunnelway to Cube Highways
NCLT Consents To Rs.6,000 Crore Sale Of Chennai Nashri Tunnelway To Cube Highways
IL&FS expects to conclude the transaction in the next few months
The National Company Law Tribunal (NCLT) has approved the sale of Chenani Nashri Tunnelway (CNTL), owned by IL&FS Transportation Networks, to Cube Highways and Infrastructure II, clearing the sale of the large asset in IL&FS Group resolution process.
For a 100 percent stake, Cube will pay Rs.6,000 crore. It will disburse a base bid of Rs.5,300 crore, with an additional Rs.400 crore earmarked for external creditors and delay adjustments of Rs.300 crore-Rs.400 crore, depending on the completion timeline.
The transaction represents the largest asset monetization under the IL&FS. It will address an extra Rs,2,500 crore of IL&FS Group’s debt. This turns the debt from Rs.43,000 crore to Rs.45,500 crore.
The bench of Justice (Retd.) VG Bisht and Prabhat Kumar gave the order after Cube revised its bid from an initial offer of Rs.3,907 crore in December 2020.
An independent enterprise valuation in 2021 pegged CNTL's value at Rs.5,257 crore. In September 2023, it was revised from Rs.5,000 crore to Rs.6,400 crore.
A spokesperson for IL&FS stated, "The NCLT approval marks an important step towards completing the CNTL sale amongst the largest assets under IL&FS portfolio to Cube. The transaction ensures maximum value to CNTL creditors, with recovery beyond 100 percent in some cases. On completion, it will address an additional Rs.2,500 crore of group debt.”
After multiple rounds of bidding, Cube's bid of Rs.5,300 crore was submitted in February 2024. It secured 98 percent creditor approval.
After a final clearance from the National Highways Authority of India (NHAI), IL&FS and Cube Highways will execute the agreed share purchase agreement.
Meanwhile, the secured lenders, including SBI, Canara Bank, and Deutsche Bank, accounting to 50 percent of CNTL's claims, are expected to recover 115 percent of their exposure.
Recently, the IL&FS Group initiated an interim distribution of 5,000 crore, comprising Rs.3,500 crore in infrastructure investment trust (InvIT) units and Rs.1,500 crore in cash, as part of its ongoing debt resolution efforts.
The InvIT units belonged to Roadstar Infra Investment Trust, which holds six key road assets of Rs.8,576 crore.
