Shareholders put a rider ahead of talks for IL&FS’S bailout
DECISION OF INVESTORS LED BY LIC WAS CONVEYED TO IL&FS MANAGEMENT DURING FIRM’S BOARD MEETING HELD ON SEPTEMBER 15
MUMBAI: Key shareholders of cash-starved Infrastructure Leasing and Financial Services Ltd (IL&FS) have asked the management to table a comprehensive turnaround and deleveraging plan, before talks of a potential bailout can be initiated, said two people directly aware of the development.
“The decision of shareholders led by Life Insurance Corp. of India (LIC) was conveyed to the IL&FS top management during the company’s board meeting held on September 15,” said the first person cited above, requesting anonymity.
“Accordingly, the management is working on a monetization plan to raise up to ₹5,000 crore through the sale of assets held by various group subsidiaries. The plan is expected to be submitted to the board for approval by the end of September.”
The IL&FS management is headed by Hari Sankaran, vice president and managing director (MD); Arun Saha, joint managing director and chief executive officer (CEO); Ramesh Bawa, MD and CEO of IL&FS Financial services; K Ramchand, CEO of IL&FS Transportation; and Vibhav Kapoor, chief investment officer of the IL&FS group.
After long-time group non-executive chairman Ravi Parthasarathy resigned in July, LIC managing director Hemant Bhargava had replaced him. However, following Bhargava’s decision to step down on September 15, former LIC chairman SB Mathur was appointed in his place.
“Assets, including several completed projects of IL&FS Maritime Infrastructure Co. Ltd., sale of land parcels held by Hill County Properties Ltd, a stake sale in IL&FS Securities Services Ltd and the sale of certain assets of IL&FS Transportation Networks Ltd maybe put on the block over the next six months,” the first person added.
on September 15 reported that LIC, which owns more than a 25% stake in the company, is likely to pump in ₹4,000 crore in the company to prevent defaults.
On September 17, rating agency Icra had revised the credit rating of IL&FS to default, after it failed to meet the repayment obligations of ₹12,000 crore in shortterm and long-term borrowings. In fact, the company’s credit rating has been downgraded twice by agencies in the past two months. It also defaulted on a ₹1,000 crore loan from Sidbi on September 13.
Mint Malvika Joshi contributed to this story.