IL&FS appoints Alvarez & Marsal for restructuring
MUMBAI: IL&FS today appointed Alvarez & Marsal to develop a comprehensive restructuring plan that will help the troubled company to steer out of the crisis.
“As part of the scope of work, they will develop a plan, seek approval of the board and than proceed to implement it,” said Hari Sankaran VC and MD of IL&FS. “The company will implement the asset monetization plan in a manner which is consistent with the comprehensive restructuring plan.”
Addressing the media post the AGM, he said that the board took four important decisions today. One, to develop a comprehensive detailed plan for restructuring of the group in order to be able to demonstrate creditors and shareholders that intrinsic value of the group was sufficient in repaying its liabilities.
Two, the board agreed to appoint a specialist agency to take this plan forward. As part of the scope of work, they will develop a plan, seek approval of the board and than proceed to implement it.
Three, the company will continue to pursue applications of Section 230 of the Companies Act to ensure that they have the moratorium required to detail out the plan in a manner in which they can satisfy their creditors and shareholders with its capacity to service debt and equity.
IL&FS has filed an application under Sec 230 of Companies Act at NCLT to propose a plan for settlement of dues. This route, if permitted, will allow current IL&FS management to hold talks directly with creditors and resolve its problems by proposing a plan to creditors.
Defaults on payments by IL&FS has resulted in rating downgrade. It defaulted on a series of debt repayments recently and was downgraded from triple AAA to D in just over a month rattling investors and calling into question the silence of rating agencies for so long.
The company’s inability to raise further capital and monetize assets are the main concerns for the downgrade. IL&FS is looking to raise Rs 4,500 crore through rights issue by October and sell assets to raise Rs 16,000 crore by selling assets of the transport business IL&FS Transportation Networks.
“As part of the scope of work, they will develop a plan, seek approval of the board and than proceed to implement it,” said Hari Sankaran VC and MD of IL&FS. “The company will implement the asset monetization plan in a manner which is consistent with the comprehensive restructuring plan.”
Addressing the media post the AGM, he said that the board took four important decisions today. One, to develop a comprehensive detailed plan for restructuring of the group in order to be able to demonstrate creditors and shareholders that intrinsic value of the group was sufficient in repaying its liabilities.
Two, the board agreed to appoint a specialist agency to take this plan forward. As part of the scope of work, they will develop a plan, seek approval of the board and than proceed to implement it.
Three, the company will continue to pursue applications of Section 230 of the Companies Act to ensure that they have the moratorium required to detail out the plan in a manner in which they can satisfy their creditors and shareholders with its capacity to service debt and equity.
IL&FS has filed an application under Sec 230 of Companies Act at NCLT to propose a plan for settlement of dues. This route, if permitted, will allow current IL&FS management to hold talks directly with creditors and resolve its problems by proposing a plan to creditors.
Defaults on payments by IL&FS has resulted in rating downgrade. It defaulted on a series of debt repayments recently and was downgraded from triple AAA to D in just over a month rattling investors and calling into question the silence of rating agencies for so long.
The company’s inability to raise further capital and monetize assets are the main concerns for the downgrade. IL&FS is looking to raise Rs 4,500 crore through rights issue by October and sell assets to raise Rs 16,000 crore by selling assets of the transport business IL&FS Transportation Networks.