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Has IL&FS defaulted on Rs 10 billion short-term loan from SIDBI?

According to a moneylife report, SIDBI has also asked one of its senior officials to resign over the loan default

BS Web Team 

IL&FS, Infrastructure Leasing and Financial Services, Mumbai
A logo of IL&FS (Infrastructure Leasing and Financial Services) is seen on a building at its headquarters in Mumbai. Photo: Reuters

(IL&FS) has reportedly defaulted on a multi-billion-rupee short-term loan from Small Industries Development Bank of India (SIDBI), according to a report by

The report also says that the bank has asked one of its senior officials in the risk management department to resign over the loan default.

has defaulted in repaying a short-term loan of Rs 10 billion to At the same time, a subsidiary of too has defaulted in repaying loan worth about Rs 5 billion to the development financial institution, the report said.

However, since does not really have any security to invoke in its loan to and the bankruptcy code as stated in the IBC does not apply to non-banking financial (NBFCs), the report further said.

IL&FS is facing liquidity problems and has asked its promoters, led by Life Insurance Corporation, to infuse Rs 45 billion by a rights issue by the end of September. Beside, IL&FS has sought additional lines of credit worth Rs 35 billion from its promoters for meeting immediate requirements.

has firmed up plans to shed its debt by 37.5 per cent, or by Rs 300 billion, to Rs 500 billion by divesting 25 projects over 12-18 months. The overall debt is expected to come down to Rs 500 billion after the planned divestments.

In August rating agency had downgraded rating for IL&FS’s long-term loans and debentures. The change in the rating factored in the elevated debt levels owing to the funding commitments towards group ventures. In a statement lst month IL&FS said the board took cognisance of the situation of overleverage. It had arisen as a significant percentage of the group’s liquidity, aggregating to over Rs 160 billion stuck in claims and termination payments.

First Published: Wed, September 05 2018. 16:35 IST