ORIX MAY RE­NEW IN­TER­EST IN IL&FS MA­JOR­ITY STAKE

Financial Chronicle - - FRONT PAGE -

JA­PAN’S Orix Cor­po­ra­tion, the 23.54 per cent stake­holder in IL&FS, may re­new its in­ter­est in ac­quir­ing ma­jor­ity stake in the debt-rid­den in­fra de­vel­oper and fi­nancier.

Orix was keen on hik­ing its stake in IL&FS ear­lier too. It wanted to in­fuse more funds into the be­lea­guered firm so that IL&FS could meet its debt obli­ga­tions. The board, how­ever, was sacked and the govern­ment placed its own nom­i­nees on board.

The Ja­panese firm’s in­ter­est in IL&FS has only grown af­ter a board led by Uday Ko­tak has taken over, sources said. It is not, how­ever, clear which route Orix wanted to take to hike its stake. It also de­pends on how LIC, the big­gest stake­holder in IL&FS, re­sponds to the idea. In case, Orix doesn’t get con­trol­ling stake, it would still want to buy out all the projects for which it has part­nered with IL&FS. In Au­gust, the erst­while board had is­sued a state­ment say­ing IL&FS plans to di­vest as­sets, cut debt by up to Rs 30,000 crore and had iden­ti­fied 25 projects that it in­tended to sell.

Of­fi­cial sources said Orix, like LIC, is keen that IL&FS is vi­able and it is ready to play an im­por­tant role in the re­vival process along with the govern­ment nom­i­nated board.

Given the in­ter­est of Orix in IL&FS, it is un­der­stood that the Ja­panese com­pany will sub­scribe in a big way to the up­com­ing Rs 4,500 crore rights is­sue of the in­fra de­vel­oper and fi­nancier. It is ex­pected that Orix will more than make up if Abu Dhabi In­vest­ment Fund, HDFC and Cen­tral Bank of In­dia don’t par­tic­i­pate in the is­sue.

Be­fore the new board took reins of the com­pany, LIC had said IL&FS can raise Rs 70,000 crore by sell­ing as­sets. LIC is also open to up its stake in the com­pany. IL&FS has a lot of con­nec­tion with govern­ment de­part­ments and does a lot of pub­lic-pri­vate part­ner­ship.

Among its scores of joint ven­tures and sub­sidiaries, IL&FS Fi­nan­cial Ser­vices, IL&FS Trans­porta­tion, IL&FS En­ergy, IL&FS En­vi­ron­ment and IL&FS Ed­u­ca­tion are the prom­i­nent ones.

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