Assessing IL&FS financial situation, finding viable solutions: Kotak

Mumbai : The new Board of debt-stricken IL&FS is in the process of assessing the financial situation of the company and is deliberating on various viable solutions to restore its solvency.

Addressing the media, after the new Board's first meeting here on Thursday, Uday Kotak, MD & CEO of Kotak Mahindra Bank, who has been appointed as the Non-Executive Chairman of the company by the Central government, said that all options are being looked at to salvage the financial position of IL&FS.

He further said that the Board will meet again to decide on the best way to implement the roadmap laid out by the NCLT (National Company Law Tribunal).

Kotak did not rule out options like sale of assets and rights issues.

The meeting comes just days after the Central government superseded the management of the beleaguered company via a NCLT order and appointed a six-member board led by Kotak to restore its financial solvency.

Key public sector lenders and undertakings such as LIC and SBI have a 25.34 per cent and 6.42 per cent stake, respectively, in the firm which has around Rs 91,000 crore in long-term debt.

As per some industry estimates, the company has an urgent liquidity requirement of around Rs 5,000 crore.

Lately, the credit crunch has led a few of the company's subsidiaries to default in servicing some of the inter-corporate deposits.

Subsequent to defaults, rating agency ICRA downgraded the ratings of its short-term and long-term borrowing programmes.

IL&FS Ltd is a core investment company and serves as the holding company of the IL&FS Group, with most business operations domiciled in separate companies which form an ecosystem of expertise across infrastructure, finance and social and environmental services.

Initially promoted by the Central Bank of India (CBI), Housing Development Finance Corporation Ltd and the Unit Trust of India, IL&FS was incorporated in 1987.

Over the years, it has inducted institutional shareholders including SBI, LIC, ORIX Corp of Japan and Abu Dhabi Investment Authority (ADIA).

As on March 31, 2018, LIC and ORIX Corp are the largest shareholders in IL&FS with their stakeholding at 25.34 per cent and 23.54 per cent, respectively. Other prominent shareholders include ADIA (12.56 per cent), HDFC (9.02 per cent), CBI (7.67 per cent) and SBI (6.42 per cent).