New Delhi: IL&FS Transportation Networks, a group company of Infrastructure Leasing and Financial Services (IL&FS), on Thursday said it proposes to divest its stake in certain road projects to ease liquidity concerns.
Besides, the company said former civil servants Vineet Nayyar and C S Rajan have been inducted in the board.
According to a regulatory filing, the board considered the proposal for divestment of its stake in certain road projects for easing the liquidity concerns and decided to seek assistance from the financial and transaction advisors appointed by IL&FS for the process.
"In connection therewith, the Board authorized exploring various options and providing relevant information and access to counterparties in respect thereto, subject to execution of requisite confidentiality and non-disclosure agreements," it said.
Earlier this week, the company appointed Arpwood Capital and JM Financial as the financial and transaction advisors (FTAs), and Alvarez and Marsal (A&M) as the restructuring advisor to the company's board.
IL&FS and its subsidiaries have defaulted on several debt repayments recently due to a liquidity crisis. It needs an immediate capital infusion of Rs 3,000 crore and is also planning a Rs 4,500-crore rights issue.
The company as of March 2018 owed over Rs 91,000 crore to banks and other creditors.
On 1 October, the government superseded the board of IL&FS and appointed a new board, with banker Uday Kotak as its executive chairman.
Besides Kotak, other members of the new board are former Sebi chairman G N Bajpai, ICICI Bank non-executive chairman G C Chaturvedi, IAS officer and the director general of shipping Malini Shankar, ex-IAS officer Vineet Nayyar, veteran auditor Nandkishore and C S Rajan, former chief secretary of Rajasthan.
In its second meeting held on 12 October, the new board appointed nominee directors for eight of IL&FS subsidiaries. It also announced several austerity measures related to personnel and operating expenses.
After the first board meeting on 4 October, Kotak had hinted that the crisis at the infra lending and engineering conglomerate was much more complex than earlier thought as the number of its subsidiaries and associates have more than doubled to 348.
He had also said resolution will take some time and the board's focus is to preserve the fair value of the assets and the enterprise to the maximum extent.
The board after its first meeting had said it is required to give a roadmap for the company to NCLT by 31 October.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Oct 26, 2018 07:19 AM