The government will unofficially provide assistance to IL&FS for working capital as part of a turn-around plan but has nudged the newly formed IL&FS board to look at divesting subsidiaries and selling projects.
The government wants the board to hire a professional agency to work out details of a broader plan to sell subsidiaries and clean up finances.
Officials said that this has been indicated to newly appointed IL&FS board chairman Uday Kotak who on Wednesday met the secretary, ministry of corporate affairs, Injeti Srinivas, ahead of the second meeting of the board.
“We are consulting the government and making progress on IL&FS,” Kotak said. The government had at the beginning of this month sought and gained orders from the NCLT to supersede the board of the major lender and replace it with a new one drawing upon talented professionals.
The new board, besides Kotak, includes G.N. Bajpai, former Sebi chief, Nand Kishore, former deputy CAG, Malini Shankar, director-general shipping, and Vineet Nayyar, IAS officer turned IT honcho.
Working capital
Officials said they believed the firm would require a working capital assistance of about Rs 500-600 crore for the remaining half of the financial year.
“We believe that IL&FS will need support for at least this and most of the next financial year while it sets its house in order and implements a plan to turnaround,” said officials. “In all the funding needs is not much, let us say about Rs 1500-2000 crore over 18 months.”
Officials said part of IL&FS’s debt which is coming up for payment will have to refinanced and this could be done through swapping of debt or re-rolling.