Multiple options explored; selling IL&FS as going concern best case scenario: Srinivas
New Delhi: Sale of debt-ridden Infrastructure Leasing and Financial Services (IL&FS) is one of the options and that seems to be the 'best case scenario' to help the company tide over the crisis, Corporate Affairs Secretary Injeti Srinivas said Monday.
IL&FS, which arranged financing for infrastructure projects, has amassed huge debts and its group companies have defaulted on payment obligations for some.
"Whatever is in the best interest of the stakeholders, including public interest, will be the factor which will guide a resolution," he said.
"As far as IL&FS is concerned, I think the report which has been submitted to the National Company Law Tribunal (NCLT) articulates the approach. So, it could be in the best scenario that IL&FS as a group enterprise is sold as a going concern," he added.
However, there are serious issues and the likelihood of such an outcome is limited, he said.
The government has seized control of IL&FS and ordered an inquiry by the Serious Fraud Investigation Office.
Speaking about other options, he said, "There are alternative approaches of looking at separate verticals, and verticals going as one consolidated entity. And the last approach is that you have an asset level sale".
But, what seems most probable is to have a combination of all the three approaches, he said, adding "all the three approaches in some sort of permutation and combination can ultimately be the outcome".
In a surprise move, the government last month took control of the crippled IL&FS group whose 358 subsidiaries owe more than Rs 91,000 crore to banks and other lenders, and appointed a new six-member board under banker Uday Kotak.
The company as of March 2018 owed over Rs 91,000 crore to banks and other creditors and since August 27, it has been on defaulting spree with nearly a score cases being reported so far.
Of this, Rs 57,000 crore are bank loans alone, most of which are from state-owned lenders.
State-owned insurer LIC is the largest shareholder with a fourth of the equity in IL&FS, and Orix Corporation of Japan owns 23.5 per cent.
Other shareholders include Abu Dhabi Investment Authority with 12.5 per cent stake, IL&FS Employees Welfare Trust with 12 per cent, HDFC with 9.02 per cent, Central Bank of India with 7.67 per cent and State Bank of India (SBI) with 6.42 per cent at the March-end 2018.