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Photo: Reuters.
Photo: Reuters.

IL&FS crises deepens, financial services arm defaults on CP

IL&FS said it will not be able to access commercial papers market for up to six months from the date of repayment of this obligation

Mumbai: For the third time in a month, crippled infrastructure conglomerate IL&FS Financial Services Monday defaulted on interest payments on commercial papers.

The interest payment on the papers were due Monday, the company informed the exchanges.

The company said it will not be able to access commercial papers market for up to six months from the date of repayment of this obligation. The company did not quantify the default amount.

“The commercial papers which were due on 24 September, could not be serviced by the company," the company said in a BSE filing.

Last Friday, its managing director and chief executive Ramesh C Bawa and some key board members had resigned amid crisis in the IL&FS group for alleged defaults in loan payments and corporate governance issues.

The infrastructure conglomerate has come under the scanner of multiple regulators, including Sebi, for alleged defaults related to financial disclosures and corporate governance.

Earlier this month, it came to light that IL&FS group defaulted on a short-term loan of 1,000 crore from Sidbi, while a subsidiary has also defaulted 500 crore dues to the development finance institution.

While IL&FS group has a consolidated debt of 91,000 crore with IL&FS alone having nearly 35,000 crore, IL&FS Financial Services 17,000 crore, which sits as standard asset for most of the lenders, according to a Nomura India report.

This story has been published from a PTI feed without modifications to the text.

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