IL&FS moves NCLT

Debt-ridden infrastructure financier IL&FS along with its forty subsidiaries have filed a petition with the National Company Law Tribunal (NCLT) seeking certain relief in connection with filing of a scheme of arrangement under Sec. 230 of the Companies Act. The section deals with the power to compromise or make arrangements with creditors and members.

When a compromise or arrangement is proposed by either the company or the creditor, the tribunal will order a meeting of is sitting on a debt pile of around `91,000 crore and had been downgraded to junk status by rating agencies following the default. Of this, `57,000 crore are bank loans alone, most of which are from state-run lenders.

LIC is the largest shareholder the creditors or class of creditors, or of the members or class of members.

The scheme will be approved if majority of persons representing three-fourth in value of the creditors, or class of creditors or members or class of members cast their votes in its favour.

The crisis, which has forced it to delay and default on couple of its debt obligations had roiled domestic markets over the last two days with lender having exposure to the group companies coming under heavy selling pressure. The company has to repay `2,000 crore by the end of September. with a fourth of the firm’s equity, while Orix Corporation of Japan owns 23.5 per cent.

Other shareholders include Abu Dhabi Investment Authority with 12.5 per cent stake, IL&FS Employees Welfare Trust with 12 per cent.