No clarity on IL&FS rights issue at AGM; shareholders against

The AGM of IL&FS, which was expected to throw up concrete plans to tide over the liquidity crisis at the government-backed infra major, Saturday failed to make any headway with no clear commitment from its large shareholders to take part in the Rs 4,500-crore rights issue.

The board of Infrastructure Leasing & Finance Services (IL&FS), headed by ex-LIC chairman S M Mathur, is scheduled to meet here this evening to decide on the rights issue.

The development comes a day after Reserve Bank deputy governors N S Vishwanathan and M K Jain met representatives of LIC, the single largest owner with 25.34 per cent, and Japan's Orix Corporation, that owns 23.54 per cent, and reportedly asked them to ensure the systematically important NBFC does not go belly up.

The city-headquartered engineering and infra lending conglomerate owes over Rs 91,000 crore to lenders, but has been on a defaulting spree since August 27. So far, it has failed to make payments as many as nine times.

Addressing the annual general meeting (AGM), Hari Sankaran, IL&FS group vice-chairman and managing director, told the shareholders, "We have addressed several issues that have been concerning you which resolve to achieve normalcy of our operations.

"The strategy has three parts: to successfully complete the ongoing rights issue to enable the company to recapitalise itself; to sell assets and repay our creditors; and third is to be able to get liquidity to repay our debtors till our asset sale cycle begins."