Rare In­dia De­faulter IL&FS Is Said to Be Delin­quent on More Debt

Financial Chronicle - - PLAN, POLICY - SALONI SHUKLA

The In­dian in­fra­struc­ture fi­nance firm be­hind a rare de­fault last month that is re­ver­ber­at­ing through the na­tion’s credit mar­kets is delin­quent on more bor­row­ings, people fa­mil­iar with the mat­ter said.

In­fra­struc­ture Leas­ing & Fi­nan­cial Ser­vices Ltd., which helped fund In­dia’s long­est tun­nel, is in de­fault on 3 bil­lion ru­pees ($41 mil­lion) of short-term bor­row­ings taken through so-called in­ter-cor­po­rate de­posits from Small In­dus­tries Development Bank of In­dia, the people said. Gov­ern­ment-backed SIDBI has sought a re­pay­ment plan, ac­cord­ing to the people, who asked not to be iden­ti­fied be­cause the de­tails are pri­vate.

The mount­ing trou­bles come af­ter IL&FS missed pay­ment on com­mer­cial pa­per last month in a rare development for In­dia’s short-term debt mar­ket, fan­ning con­cerns among in­vestors in the mon­ey­mar­ket funds that hold such se­cu­ri­ties. The Re­serve Bank of In­dia has ini­ti­ated a spe­cial au­dit of the firm, BloombergQuint has re­ported.

IL&FS has an­other 1.5 bil­lion ru­pee in­ter-cor­po­rate de­posit pay­ment due on Sept. 14, ac­cord­ing to the people. SIDBI has asked IL&FS to sub­mit a plan within 10 days to re­pay the 3 bil­lion ru­pee de­faulted por­tion plus the 1.5 bil­lion ru­pees com­ing due on Sept. 14, they said.

IL&FS had three tranches to­tal­ing 3.5 bil­lion ru­pees of ICDs from SIDBI due on dif­fer­ent days since Au­gust 27. It hasn’t made full pay­ment on any of those tranches, and has only paid 500 mil­lion ru­pees to­ward the to­tal, leav­ing 3 bil­lion ru­pees un­paid, the people said.

A SIDBI spokesman and an IL&FS spokes­woman de­clined to com­ment.

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