Photo: Alamy
Photo: Alamy

IL&FS Financial Services declares fresh defaults of ₹395 crore

IL&FS Financial Services defaults were in respect of five bank loans (including interest) totalling 239.50 crore, term deposit obligation of 103.53 crore and short term deposit worth 52.43 crore

New Delhi: IL&FS Financial Services on Thursday said it has defaulted on seven fresh payment obligations worth 395.46 crore.

The company was unable to service its obligations in respect of bank loans (including interest), term deposit and short term deposit, it said in a regulatory filing.

These defaults were in respect of five bank loans (including interest) totalling 239.50 crore, term deposit obligation of 103.53 crore and short term deposit worth 52.43 crore.

The short term deposit of 52.43 crore was due for 27 September 2018, while the term deposit of 103.53 crore was to be serviced on 25 September.

In bank loan repayments, it defaulted on 100.60 crore and 50.30 crore obligations due for 24 September, while a 62.90 crore loan due on 26 September could not be serviced.

It also defaulted on loan repayments of 50.20 crore (due 16 September) and 20.50 crore (12 September), IL&FS Services said in the filing.

Having already declared three defaults this month, the company has thus far not been able to service a total of 10 obligations.

On Monday, it had disclosed defaulting on interest payments on commercial papers.

Following this, the company has been barred from accessing the commercial papers market for up to six months from the date of repayment of this obligation.

The troubled IL&FS group has been on a spree of defaults which led to resignation of IL&FS Financial Services Managing Director and Chief Executive Ramesh C Bawa and some key board members on 21 September.

Amidst monetary defaults, the group is also grappling with corporate governance issues.

IL&FS has an aggregate debt pile of 91,000 crore and it has been downgraded to junk status by rating agencies following the default.

Of this,₹57,000 crore are bank loans alone, most of which are from state-run lenders.

State-owned LIC is the largest shareholder with a fourth of the firm’s equity, while Orix Corporation of Japan owns 23.5%.

Other shareholders include Abu Dhabi Investment Authority with 12.5% stake, IL&FS Employees Welfare Trust with 12%, HDFC with 9.02%, Central Bank of India with 7.67% and State Bank of India (SBI) with 6.42% at March-end 2018.

IL&FS Financial Services earlier also informed the stock exchanges that Infrastructure Leasing & Finance Services Limited (IL&FS), the promoter and majority shareholder of the company, filed an application with the National Company Law Tribunal, Mumbai Bench on 24 September seeking certain reliefs in connection with filing of a scheme of arrangement under Section 230 of the Companies Act, 2013.

LIC and SBI have stated that they will not let the financial conglomerate to collapse and efforts are on to help the entity.

(This story has been published from a wire agency feed without modifications to the text. )

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