IL&FS board invites buyers for stake in two of its subsidiaries

Mumbai: The government-appointed board of Infrastructure Leasing and Financial Services Ltd (IL&FS) has started the process to sell some of its assets to help pare the company’s debt.

IL&FS will solicit expressions of interest in two assets engaged in the securities services business—IL&FS Securities Services Ltd, a clearing member in equity and other derivatives; and ISSL Settlement & Transaction Services Ltd, which provides professional clearing services in the commodities derivatives segment.

Both are majority-owned assets of the parent company IL&FS. IL&FS holds 81.24% of IL&FS Securities Services Ltd, while the other shareholders are IL&FS Employee Welfare Trust (9.01%), ORIX Corporation, Japan (4.75%) and Croupier Prive Mauritius (5%), according to its website.

The board has appointed Arpwood Capital Pvt. Ltd and JM Financial Ltd as financial and transaction advisors, along with Alvarez & Marsal as resolution consultants, IL&FS said in a release.

“The board is cognizant that these steps are required to advance the process for putting together resolution plan(s) for the IL&FS group, based on market interest and price discovery for various assets,” IL&FS said. “Any binding transaction for the sale of assets, as well as the resulting resolution plan(s), will be subject to requisite approvals (including the NCLT) before the transactions are implemented.”

Under its previous management, IL&FS Securities Services was one of the companies that was first identified for sale. IndusInd Bank had placed an offer of ₹ 400 crore, which had been approved by capital markets regulator Securities and Exchange Board of India (Sebi) in September. While Mint could not independently verify this, Monday’s press release indicates that the sale process for the company will now begin from scratch.NextMAds

IL&FS Securities had revenue of ₹ 324.5 crore in FY18 and over 1,000 broker client accounts and FPI and FII investors on its rolls, The Economic Times reported in September.

On 31 October, the Uday Kotak-led board of the debt-laden company proposed a three-pronged strategy to revive the company and its web of subsidiaries—significant capital infusion at the group level from credible and financially strong investors, sale of subsidiaries at the vertical level and resolution at the asset level. The report, submitted to the National Company Law Tribunal, said the board would work towards the final resolution, in stages and parts, over the next 6-9 months.