Crisis-ridden IL&FS starts process to monetise assets; to sell stake in financial services assets

IL&FS Group''s total debt stood at Rs 94,215.6 crore as on 8 October 2018.

FP Staff November 13, 2018 09:29:31 IST
Crisis-ridden IL&FS starts process to monetise assets; to sell stake in financial services assets

Debt-laden Infrastructure Leasing and Financial Services (IL&FS) has started work on plans to sell off assets, part of a wider restructuring of the group, the company said on Monday.

In a bid to monetise its assets, crisis-ridden IL&FS on Monday initiated the process for divesting its stake in IL&FS Securities Services and ISSL Settlement & Transaction Services.

The board of Infrastructure Leasing &Financial Services Ltd (IL&FS) appointed by the NCLT had submitted to the Ministry of Corporate Affairs a report on the progress and the way forward, which in turn was submitted to the NCLT.

Accordingly, the board has decided to solicit expressions of interest to assess the interest for a sale of its stake in IL&FS Securities Services and ISSL Settlement &Transaction Services.

"As stated in the said Report, it is the objective of the board to achieve, by one or more plan(s), the resolution of the IL&FS group through certain measures, including asset divestments," the debt-ridden company said in a statement.

The release further said that in order to ascertain market interest, and to examine feasibility of maximisation of value in an orderly and transparent manner, the board, while continuing to evaluate all options, on Monday initiated the process of exploring the sale of an asset engaged in the securities services business.

"The board has appointed Arpwood Capital Pvt Ltd and JM Financial Ltd as Financial &Transaction Advisors, along with Alvarez & Marsal as Resolution Consultants," said the company.

IL&FS Group and its companies have defaulted on many debt instruments due to insufficient funds.

Crisisridden ILFS starts process to monetise assets to sell stake in financial services assets

Representational image. Reuters.

The group's total debt stood at Rs 94,215.6 crore as on 8 October 2018.

The firm needs an immediate capital infusion of Rs 3,000 crore and is also planning a Rs 4,500-crore rights issue.

The board, the release added, is "cognizant" that these steps are required to advance the process for putting together resolution plan(s) for the IL&FS group, based on market interest and price discovery for various assets.

Any binding transaction for the sale of assets, as well as the resulting resolution plan(s), will be subject to requisite approvals (including the NCLT) before the transactions are implemented.

IL&FS Securities Services is a professional clearing member in equity and other derivatives while ISSL Settlement & Transaction Services is engaged in providing professional clearing services in the commodities derivatives segment.

The government took control of IL&FS, a major infrastructure financing and development company, last month after it defaulted on some of its debt, triggering wider concerns about risk in the rest of the country’s financial system.

Late last month, a new government-appointed IL&FS board submitted a plan to revive the group to a company law tribunal paving the way for a potential restructuring.

The Ministry of Corporate Affairs is representing the government and the IL&FS board at the National Company Law Tribunal (NCLT).

The NCLT had told the ministry that the holding company will have to make all its 346 subsidiaries part of the resolution plan within 15 days.

Previously, the company had said the new board would finalise and implement its plans in stages over the next six to nine months subject to market and economic conditions.

The court will hear an update on the plans on 3 December.

--With inputs from agencies

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Kim's last gift to NKorea: loads of fish
World

Kim's last gift to NKorea: loads of fish

State media reported that Kim Jong ul made sure the fish was trucked to the capital city, "even in the mourning period".

IL&FS group value to be preserved, says chairman Uday Kotak after five-hour board meet
Business

IL&FS group value to be preserved, says chairman Uday Kotak after five-hour board meet

After its maiden meeting, chairman of the new board Uday Kotak told reporters that the board will meet the IL&FS shareholders including state-run LIC which has 25.34% stake, Orix Corporation of Japan with over 23.7% stake, HFC, SBI and Central Bank, at an appropriate time

Tears over Kim Jong-il's death are not fake
World

Tears over Kim Jong-il's death are not fake

It is no surprise to find people shedding tears over the passing of a dictator, but what may surprise is that some of the tears shed are spontaneous.