Assessing IL and FS situation, finding solutions: Kotak

Addressing the media, after the new Board’s first meeting here on Thursday, Uday Kotak, MD & CEO of Kotak Mahindra Bank, who has been appointed as the Non-Executive Chairman of the company by the Central government, said that all options are being looked at to salvage the financial position of IL&FS. He further said that the Board will meet again to decide on the best way to implement the roadmap laid out by the NCLT (National Company Law Tribunal).

Kotak did not rule out options like sale of assets and rights issues. The meeting comes just days after the Central government superseded the management of the beleaguered company via a NCLT order and appointed a six-member board led by Kotak to restore its financial solvency. Key public sector lenders and undertakings such as LIC and SBI have a 25.34 per cent and 6.42 per cent stake, respectively, in the firm which has around Rs 91,000 crore in long-term debt. As per some industry estimates, the company has an urgent liquidity requirement of around Rs 5,000 crore.  Lately, the credit crunch has led a few of the company’s subsidiaries to default in servicing some of the inter-corporate deposits. Subsequent to defaults, rating agency ICRA downgraded the ratings of its short-term and long-term borrowing programmes.