The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the sale of Infrastructure Leasing and Financial Services' (IL&FS) education assets to Falafal Technology Private Limited, a subsidiary of Lexington Equity Holdings Ltd (LEHL).
As a part of the deal, Falafal has agreed to acquire 73.90 per cent of the shares of Schoolnet India Limited, in which IL&FS currently holds 68.93 per cent, IL&FS Employee Welfare Trust holds 4.73 per cent and the rest is held by LEHL. The deal will essentially mean that LEHL will service Schoolnet’s entire debt of Rs 600 crore and pay a small equity to IL&FS to the tune of Rs 7.36 crore and deferred purchase consideration of Rs 6.29 crore. LEHL has also agreed to give an upside amount to IL&FS, subject to it realising an amount in excess of Rs 171.62 crore from the sale of 100 per cent of the equity shares of Schoolnet.
The resolution process cost incurred in the resolution process (Resolution Process Costs) would be deducted from the upfront consideration and will be transferred to a designated account.
The education assets of IL&FS include Schoolnet India Limited (formerly known as IL&FS Education and Technology Services Limited), Skill Training Assessment Management Partners Limited (STAMP) and IL&FS Cluster Development Initiative Limited (ICDI). STAMP and ICDI are wholly-owned subsidiaries of Schoolnet. Schoolnet has another subsidiary - IL&FS Skill Development Corporation Limited (ISDC), a joint venture with National Skill Development Corporation Limited (NSDC), in which Schoolnet holds 80.01 per cent and the remaining 19.99 per cent is held by NSDC.
Furthermore, the NCLT has granted approval to IL&FS to initiate bankruptcy proceedings for ITNL International DMCC (IIDMCC) and ITNL Infrastructure Developers LLC (IIDL), both of which are offshore entities of the IL&FS group, in accordance with laws of Dubai before Dubai courts.
IIDMCC is the wholly-owned subsidiary of ITNL International Pte Limited (IIPL), which in turn is a wholly-owned subsidiary of IL&FS Transportation Networks Ltd (ITNL). IIDL was incorporated for implementing Transport Infrastructure Projects in United Arab Emirates (UAE) on Public Private Partnership (PPP).
The bankruptcy tribunal has also agreed to the proposal of IL&FS to strike off IIPL Laos, an offshore entity of the group, in accordance with laws of Singapore. IIPL Laos is a subsidiary ITNL International Pte Limited, which in turn is a subsidiary of IL&FS Transportation Networks Limited (ITNL).
IL&FS has laid down a roadmap to resolve 57 per cent of the group’s nearly Rs 1 trillion debt pile. According to the plan, debt worth Rs 50,500 crore would be pared by the end of financial year 2020-21, and resolution of an additional Rs 6,650 crore would continue beyond FY21. This takes the cumulative debt to be addressed to Rs 57,240 crore, or 57 per cent of the group’s total debt of Rs 99,000 crore.