A meeting called by the Reserve Bank of India with the shareholders of IL&FS is on schedule, said a source close to the development. The meeting will discuss how the shareholders — led by Life Insurance Corporation of India (LIC) and State Bank of India (SBI) — can chip in to salvage the company.
On Saturday, IL&FS shareholders will vote on the rights issue proposed by the company with a premium of Rs 140 a share.
IL&FS shareholders include LIC which owns a 25.34 per cent stake, HDFC Ltd which owns 9.02 per cent, Central Bank of India (7.67 per cent) and SBI (6.42 per cent).
These institutions jointly hold around 49 per cent stake in IL&FS while foreign institutional investors including Japan’s Orix Corporation and Abu Dhabi Investment Authority hold a 23.54 per cent and 12.56 per cent stake, respectively.
As a part of the plan for de-leveraging the balance sheet and monetisation of portfolio, IL&FS now plans to raise equity capital of Rs 45 billion by way of rights issue and raise a line of credit of Rs 35 billion from LIC and SBI to meet any temporary liquidity requirement.
IL&FS is seeking to launch its rights issue at the rate of Rs 150 a share which will not be subscribed by IL&FS employees who own 12 per cent stake in the company and by few lenders like Central Bank of India which itself came under the RBI’s preventive corrective action in June last year.
One of IL&FS’s creditors, Small Industries Development Bank of India (SIDBI), moved the NCLT Mumbai against IL&FS seeking its money back. IL&FS owes it close to Rs 10 billion. IL&FS also moved the NCLT on Monday, “seeking certain reliefs” in connection with filing of scheme of arrangement.
The scheme will be prepared in compliance with applicable laws and subject to necessary consents of the shareholders, creditors and board of directors of the relevant entities, the company said in a filing with the BSE.
Many of IL&FS’s lenders are expecting a haircut of 30-40 per cent on their exposure to the company and to its group companies.
The subsidiaries which have moved the NCLT include IFIN, ITNL, IL&FS Energy Development and IL&FS Engineering & Construction Ltd.
The other companies
include roads and construction companies.