Commercial Papers (CP) that were due on August 28, 2018 and August 30, 2018 could not be repaid on the due date. These were settled in full on August 31, 2018 by the Company.
In compliance with the Reserve Bank Commercial Paper Directions, 2017, the Company will not access CP market up to February 28, 2019, IL&FS informed the Bombay Stock Exchange.
Meanwhile, according to rating agency Icra, the company had said that the requisite funds had been earmarked for meeting the CP obligations falling due on the above-mentioned redemption dates. These funds could not be released from the bank to the relevant mutual fund within the prescribed banking time owing to certain technical reasons.
The entire CP obligations, along with penal charges, were repaid on August 31.
Since the delay in CP redemption was due to technical issues and the facilities were repaid through surplus available with IFIN along with funding support from the group, the rating remains unchanged, Icra said.
Rating agency said it would continue to closely monitor the company’s liquidity position. The progress achieved on the parent’s plans of raising capital, including the proposed rights issue and line of credit from the shareholders, would also be a rating monitorable.
The Reserve Bank of India (RBI) has asked IL&FS Financial Services to reduce debt exposure in all IL&FS group entities by March 2019, in conformity with the regulations on group debt exposure for non-banking financial companies (NBFCs).
The RBI asked IL&FS Financial Services, a 100 per cent subsidiary of IL&FS, to bring its exposure down within a year, after the inspection revealed norms on capital adequacy ratio (CAR) and group exposure limits were breached in March. As on March 31, the NBFC’s exposure to the top 10 group firms was around 26 per cent of total credit
Faced with overleverage and tight liquidity conditions, IL&FS group will shed its overall debt by Rs 300 billion by divesting sale of 25 projects over 12-18 months. ILFS has put in motion work to raise Rs 45 billion to shore up the capital. The Rights issue would be completed by October 30, 2018. As on March 31, 2018, IL&FS net worth was Rs 74 billion.
IL&FS is also approaching Shareholders for support to the extent of Rs 90 billion to enhance the liquidity position.