National Highway Authority of India (NHAI) may come to the rescue of cash-strapped Infrastructure Leasing and Financial Services (IL&FS) soon as the government is mulling a revival plan.
IL&FS crisis: National Highway Authority of India (NHAI) may come to the rescue of cash-strapped Infrastructure Leasing and Financial Services (IL&FS) soon as the government is mulling a revival plan before the end of the month. TV news channels reported that NHAI may acquire incomplete projects of the infrastructure financing giant. NHAI may retain these incomplete projects or invite bids from other companies.
Meanwhile, the newly-appointed board under banker Uday Kotak held its second meeting on Friday, in which nominee directors for eight of its subsidiaries were appointed. Earlier, the new board had said that IL&FS is a complicated case and it would take time to revive it while expressing confidence that its revival is possible. IL&FS liquidity crisis came to light last month when the company defaulted on several debts.
The government swung into action immediately and superseded IL&FS board on October 1. From Vineet Nayyar to veteran auditor Nandkishore and CS Rajan, top industry experts are involved in IL&FS revival. The company needs an immediate capital infusion of Rs 3,000 crore and is also planning a Rs 4,500-crore rights issue, PTI reported.
IL&FS Crisis: All You Need To Know
- IL&FS group has a total debt of Rs 91,000 crore, of which Rs 57,000 crore is from PSU banks.
- The infrastructure financing giant has been facing liquidity issues and defaulted, first, on Rs 1,000 crore from Small Industries Development Bank of India (SIDBI) last month, which brought the problem to light.
- Later, it also defaulted on commercial paper and inter-corporate deposit. Following this, its various long-term and short-term borrowing programmes were downgraded to “default” or “junk” grades by rating agencies.
- IL&FS has plans of raising Rs 45,000 crore through the issue of shares and Rs 3,500 as long-term credit from shareholders. The company said that Rs 16,000 crore of its fund was stuck with concession authorities.
- On September 22, its managing director and chief executive officer Ramesh Bawa resigned from his position, along with four other independent directors and a non-executive director.
- On October 1, the government put Uday Kotak in-charge of the new board.
- On October 4, the board held its first meeting, in which Vineet Nayyar, who also headed Satyam, as the Vice Chairman and the Managing Director of IL&FS.