However, since SIDBI does not really have any security to invoke in its loan to IL&FS and the bankruptcy code as stated in the IBC does not apply to non-banking financial companies
(NBFCs), the moneylife report further said.
IL&FS is facing liquidity problems and has asked its promoters, led by Life Insurance Corporation, to infuse Rs 45 billion by a rights issue by the end of September. Beside, IL&FS has sought additional lines of credit worth Rs 35 billion from its promoters for meeting immediate requirements.
IL&FS group has firmed up plans to shed its debt by 37.5 per cent, or by Rs 300 billion, to Rs 500 billion by divesting 25 projects over 12-18 months. The overall debt is expected to come down to Rs 500 billion after the planned divestments.
In August rating agency ICRA had downgraded rating for IL&FS’s long-term loans and debentures. The change in the rating factored in the elevated debt levels owing to the funding commitments towards group ventures. In a statement lst month IL&FS said the board took cognisance of the situation of overleverage. It had arisen as a significant percentage of the group’s liquidity, aggregating to over Rs 160 billion stuck in claims and termination payments.