INSUBCONTINENT EXCLUSIVE:
MUMBAI: Life Insurance Corp
of India (LIC) may lend as much as Rs 1,200 crore to cash-strapped Infrastructure Leasing Financial Services (ILFS) to help tide over its
non-banking finance company is looking to raise funds through a rights issue to shore up capital, reduce debt and recapitalise group
in the company, is considering lending this amount and a decision will soon be taken by the investment committee
its stake by subscribing to the rights issue as well
ILFS is looking to raise Rs 4,500 crore through the rights issue in the next 12-18 months.
It expects to reduce its overall debt by Rs
30,000 crore by offloading some of its assets
Out of a portfolio of 25 projects identified for sale, the company has received interest for 14, it has said in a notification.
On March 31,
ILFS had a net worth of Rs 7,400 crore
In addition, the board has approved re-capitalisation of Rs 5,000 crore in ILFS Financial Services, ILFS Transportation, ILFS Energy, ILFS
Environment, and ILFS Education.
On September 10, rating company Icra downgraded the nonconvertible debentures (NCDs) of ILFS to BB from AA+
on higher levels of debt and the inability to raise funds as quickly as needed
are the largest shareholders in ILFS with stakes of 25.34% and 23.54%, respectively.
Earlier this week, Insurance Regulatory and Development
Authority of India (Irdai) chairman SC Khuntia 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 in ILFS include Abu Dhabi Investment Authority (ADIA) 12.56%,
Complex (BKC) to raise funds as it seeks to stave off repayment challenges and switches to an asset-light strategy.
ILFS recently defaulted
on inter-corporate deposits and commercial paper to the tune of about Rs 450 crore, bringing it under Reserve Bank of India scrutiny besides
being subjected to the rating downgrade.
