While the amount of default could not be ascertained, a Moneylife report said it was a short-term loan amounting to Rs 10 billion.
This is probably the first time that a large financial institution has defaulted on a loan repayment, said banking sources.
SIDBI does not have any security to invoke on its loan to IL&FS and the Insolvency and Bankruptcy Code (IBC) does not apply to non-banking financial companies
(NBFCs), the Moneylife report further said.
Even a small default like this will have a negative impact on the credit rating of IL&FS group companies, and hence on their financing going forward.
In August, rating agency Icra had downgraded 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 last 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.
IL&FS has been 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. Besides, IL&FS has sought additional lines of credit worth Rs 35 billion from its promoters for immediate requirements.
IL&FS group 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.
As on March 31, 2018, the company had a reported gearing of 3.04 times (on a standalone basis) and regulatory gearing of 2.30 times.