IL&FS Group crisis deepens

Mumbai, September 24

For the third time in a month, crippled infrastructure conglomerate IL&FS Financial Services today defaulted on interest payments on commercial papers.

The interest payment on the papers were due on Monday, the company informed the stock exchanges.

The company said it will not be able to access commercial papers market for up to six months from the date of repayment of this obligation. However, the company did not quantify the default amount.

“The commercial papers which were due on September 24, could not be serviced by the company,” the company said in a BSE filing.

Last Friday, its Managing Director and Chief Executive Officer Ramesh C Bawa and some key Board members had resigned amid crisis in the IL&FS group for alleged defaults in loan payments and corporate governance issues.

The infrastructure conglomerate has come under the scanner of multiple regulators, including SEBI, for alleged defaults related to financial disclosures and corporate governance.

Earlier this month, it came to light that IL&FS group defaulted on a short-term loan of Rs 1,000 crore from SIDBI, while a subsidiary has also defaulted Rs 500 crore dues to the development finance institution.

While IL&FS group has a consolidated debt of Rs 91,000 crore with IL&FS alone having nearly Rs 35,000 crore, IL&FS Financial Services Rs 17,000 crore, which sits as standard asset for most of the lenders, according to a Nomura India report. — PTI

Mounting troubles 

• The infrastructure conglomerate has come under the scanner of multiple regulators, including SEBI, for alleged defaults related to financial disclosures and corporate governance
• Earlier this month, it came to light that IL&FS Group defaulted on a short-term loan of Rs 1,000 crore from SIDBI, while a subsidiary has also defaulted Rs 500 crore dues to the development finance institution
• While IL&FS Group has a consolidated debt of Rs 91,000 crore with IL&FS alone having nearly Rs 35,000 crore, IL&FS Financial Services Rs 17,000 crore, which sits as standard asset for most of the lenders
• Last Friday, its MD and CEO Ramesh C Bawa and some key Board members had resigned amid crisis in the IL&FS group for alleged defaults in loan payments and corporate governance issues
• The company, however, did not quantify the default amount.