The new board of Infrastructure Leasing & Financial Services (IL&FS) will likely seek at least 3-5 more months from the National Company Law Tribunal (NCLT) to submit a concrete resolution plan.
According to sources, the board does not have enough time. There is nothing concrete as a plan that can be submitted.
Therefore, the board will ask for a few more months, say about three to five months, to submit a specific plan. For now it will be kept open-ended.
The board reportedly still has some due diligence to do and cannot draw a plan before it is done.
"It is a short period and it needs to be seen how much time the National Company Law Tribunal (NCLT) gives the new board," sources said.
The government-appointed board, led by Kotak Mahindra Bank chief Uday Kotak, had to submit a resolution plan for IL&FS to the NCLT on October 31. However, the time limit has not been met.
IL&FS debt issues
The series of defaults by IL&FS and its group companies between August and early September cast a shadow over the entire non-banking finance (NBF) sector.
On October 1, the government, which is a quasi-owner of IL&FS, forced out the previous board after it argued before the NCLT that the company’s management presented a rosy picture when all was not well.
The tribunal had approved the government’s supersession of IL&FS’ board, accepting that the move was necessary in order to protect the financial markets.
In a press interaction after its first meeting on October 4, the new board said that the group actually had 348 subsidiaries, more than twice the 169 the company had disclosed earlier.
The IL&FS board is now considering several options, including selling stake in the company and its subsidiaries to a financially strong investor.
"All options including selling of subsidiaries, selling of select assets or operating units. However, not many buyers have come forward yet. We will wait for more clarity," the above-mentioned source said.
IL&FS’ total debt stood at Rs 91,091.30 crore as on March 31, 2018, and the liabilities could increase further, according to the company’s new board.>