INSUBCONTINENT EXCLUSIVE:
ILFS hasn't stopped missing payments even after the government sacked the lender's board.The government is examining options including an
outright sale of Infrastructure Leasing Financial Services Ltd., a person with knowledge of the matter said, amid attempts to stem defaults
at the lender with $12.6 billion of debt.A plan to be presented to a bankruptcy court Wednesday by the state-appointed board of the lender
includes selling the entire stake to a financially strong investor and ensure business continuity, the person said, asking not to be
identified as the matter is private
Other options include splitting businesses according to verticals and disposing them off to several buyers or injecting liquidity at group
level to avoid an outright sale.The beleaguered financier hasn't stopped missing payments even after the government sacked the lender's
board and pledged to stem defaults
Fixing the cash flow crisis at the company is vital to revive confidence in India's credit markets at a time when Asia's third-largest
economy grapples with rising oil prices and a plunging currency
The Serious Fraud Investigation Office this month started an investigation into ILFS.The plan finalized by the new board led by Asia's
richest banker, Uday Kotak will be put up before the National Company Law Tribunal on October 31
The court had approved the government's move to take over the lender and accepted the plea that the move was crucial to protect the
Finance Ministry spokesman D.S
Malik declined to comment.The lender's borrowing from banks and financial institutions is Rs 63,000 crore on a consolidated basis, according
to the balance sheet for the year ended March 2018, the official said
Exposure of the banking sector to ILFS is pegged at around Rs 53,000 crore, about 16 per cent of all lending to non-banking finance
companies.While the matter is being heard in the court, the board could look at selling assets, both core and non-core, for infusing
liquidity and ensuring timely loan repayments, the official said.The troubles at ILFS had been intensifying since July, when company founder
Ravi Parthasarathy stepped down, citing health reasons
Defaults from August within the group rattled money markets, added to the pressure on corporate bond yields and sparked a sell-off in the
stock market.The ILFS Group is a bewilderingly complex conglomerate, with 348 direct and indirect subsidiaries
Its investors include Life Insurance Corp., India's largest life insurer; State Bank of India, its largest bank; and Housing Development
Finance Corp, its largest mortgage lender
is the company's second-largest shareholder.
