IL&FS on Friday said that its managing director and chief executive officer Ramesh Bawa has resigned from his position. The resignation of Bawa has come amid tight liquidity situation at the group, even leading to defaults on interest payments.
Along with Bawa, four other independent directors and a non-executive director have also quit the company. Moreover, the company has received another setback from Delhi High Court, which restrained its roads arm IL&FS Transportation Networks (ITNL) from selling any of its assets till December 7.
Here’s all you need to know about the crisis in IL&FS
- IL&FS group is reeling under huge outstanding debt and planning to sell assets to raise funds. News agency PTI reported that IL&FS has a total debt of Rs 91,000 crore, of which, Rs 57,000 is from PSU banks.
- The conglomerate has been facing liquidity issues and defaulted on a Rs 1,000 crore from Small Industries Development Bank of India (SIDBI) earlier this month, followed by defaults on commercial paper and inter-corporate deposit.
- The conglomerate’s various long-term and short-term borrowing programmes have been downgraded to “default” or “junk” grades by rating agencies. ICRA downgraded the group twice in a fortnight.
- The group had been planning to raise Rs 45,000 crore through the issue of shares and Rs 3,500 as long-term credit from shareholders. The conglomerate had said that Rs 16,000 crore of its fund is stuck with concession authorities leading to liquidity issues.