“A decision has been taken to elect Mr Mathur as the chairman of the board,” said a source close to the development. “Other crucial issues were discussed around raising capital and selling stake in around 25 projects. The decisions around this will be taken on the annual general meeting held on September 29.”
Hemant Bhargava will continue as nominee director of LIC. Hari Sankaran will continue as vice chairman and managing director.
IL&FS has approached LIC for Rs 1,000 crore to Rs 1,200 crore loan in form of short term capital. LIC, which has over 25% stake in the company, is looking to subscribe to the rights issue to maintain its stake at the present level.
The company is looking to raise Rs 4,500 crore through rights issue in the next 12-18 months. It expects to reduce its overall debt by Rs 30,000 crores. To reduce the level of debt, out of a portfolio of 25 projects identified for sale, the company has received interest for 14 projects.
As on March 31, 2018, IL&FS had net worth of Rs 7,400 crores. In addition, the Board also approved re-capitalization of Rs 5,000 crores in IL&FS Financial Services, IL&FS Transportation, IL&FS Energy, IL&FS Environment, and, IL&FS Education.
On September 10, rating company ICRA has downgraded NCDs of IL&FS to BB from AA+ on higher levels of debt and inability to raise funds as quickly as is needed. The group has around Rs 1 lakh crore worth of debt on its books.
LIC and ORIX Corporation Japan are the largest shareholders in IL&FS with their stake holding at 25.34% and 23.54%. Earlier this week, Irdai chairman S C Khuntia had said that he expects insurers to follow prudent investment practices and in case of a downgrade, retrieve the maximum possible and invest elsewhere.
Other investors include Abu Dhabi Investment Authority (ADIA) 12.56%, HDFC 9.02% and State Bank of India 6.42%.