RBI cancels tomorrow's meeting with IL&FS shareholders; company's AGM scheduled for 29 September

Mumbai: The Reserve Bank of India (RBI) has cancelled the Friday’s meeting with the shareholders of debt-laden Infrastructure Leasing and Finance Services (IL&FS), according to banking sources. The apex bank had earlier called a meeting with key shareholders of IL&FS, including Life Insurance Corporation of India (LIC) and State Bank of India, after the company and its subsidiaries defaulted on repayments of various debt instruments. “Tomorrow’s meeting has been cancelled. As a regulator, they want to know what is the course of action and what is the roadmap that the firm is taking,” a source said. “RBI wants details of the plan for future or corrective action which are to be taken,” another source said. [caption id=“attachment_5129811” align=“alignleft” width=“380”] Representational image. Reuters[/caption] The next date for meeting has not been decided yet, the source added. IL&FS’s annual general meeting is scheduled for 29 September here. LIC and Orix Corporation of Japan are the largest shareholders of IL&FS with 25.34 and 23.54 percent stake, respectively, while Abu Dhabi Investment Authority, HDFC, Central Bank of India and SBI hold 12.56 percent, 9.02 percent, 7.67 percent and 6.42 percent, respectively. IL&FS group is facing serious liquidity crisis and has defaulted on interest payment on various debt repayments since 27 August. It has over Rs 91,000 crore in debt. The company needs an immediate capital infusion of Rs 3,000 crore and is planning a Rs 4,500-crore rights issue. At a meeting held earlier this month, the key shareholders of the debt-ridden company, including LIC, SBI and HDFC, had kept a pre-condition for it to raise funds through its assets or non-core businesses, before any additional money could be pumped in. There have been reports that IL&FS has even put on block its headquarters in the city for around Rs 1,300 crore. On 4 September, it came to light that IL&FS had defaulted on a short-term loan of Rs 1,000 crore from SIDBI, while its subsidiary has also defaulted Rs 500 crore dues to the development finance institution. On Monday, IL&FS Financial Services also defaulted on repayment of commercial papers due that day.