LIC open to taking part in IL&FS rights issue
The insurer might also look at raising its equity stake in IL&FS, subject to regulatory permission
Mumbai: Life Insurance Corporation, India’s largest state-run insurer, is open to participating in a rights issue by debt-ridden Infrastructure Leasing & Financial Services (IL&FS), the insurer’s chairman V.K. Sharma told reporters on Friday.
IL&FS is a major infrastructure finance and construction company, which has built up big debts and is now facing a credit crunch.
IL&FS’s board in August approved raising funds via a Rs 45 billion ($620.65 million) rights issue and a Rs 30 billion debt-reduction plan through asset sales.
The insurer might also look at raising its equity stake in IL&FS, subject to regulatory permission, Sharma said, adding that the value of assets of the IL&FS was Rs 600 billion.
Sharma and Rajnish Kumar, chairman of State Bank of India, were set to meet India’s economic affairs secretary on Friday to discuss the IL&FS crisis, a source familiar with the matter said.
IL&FS’s other major shareholders also include Japan’s Orix Corp and the Abu Dhabi Investment Authority, according to the company’s website up to the end of the financial year to March 2018.