Ifci Seeks Nod For Rs 1000 Crore Pref Issue

IFCI Ltd is seeking shareholder approval to raise Rs 1,000 crore by issuing preference shares to part finance its redemption payment obligation.

The troubled financial institution is moving an enabling resolution in this regard at its forthcoming annual general meeting to issue 100,00,00,000 preference shares of the face value of Rs 10. The proceed would help the institution meet its redemption obligation to a large extent.

The institution had issued preference shares worth Rs 429.2 crore from time to time. A majority part of that will be up for redemption in the current and next financial year. The institution lacks resources to redeem the shares.

 

IFCI will have to redeem shares worth of Rs 357.2 crore in 2002-3 and 2003-4. "These shares can be redeemed either by profits of the company or by proceeds of fresh shares issued. As the company does not have sufficient profit to redeem the shares, fresh shares will have to be issued for redemption of shares issued earlier," sources said.

IFCI had sought government assistance to tide over its liquidity problem. The institution is looking at a cash infusion of up to Rs 5,000 crore to shore up its capital adequacy ratio (CAR) and also meeting repayment obligation.

IFCI's non-performing assets (NPA) have surged to Rs 3897.6 crore at the end of last fiscal. This accounts for 22.21 per cent of company's outstanding assistance. NPAs came down from Rs 3937.1 crore at the end March 31, 2001.

Though the level of NPA came down in 2001-2 from the previous year, it was relatively higher in percentage terms owing to the drop in the outstanding assistance.

The company has posted loss of Rs 884.7 crore in the fiscal ending 2001-2. It also recorded loss of Rs 221.5 crore in the first quarter of 2002-3.