The new board of Infrastructure Leasing and Financial Services Ltd (IL&FS) submitted three rescue options to the bankruptcy tribunal on Wednesday, moving forward on a plan to revive the financing and construction company.
The three options involve capital infusion, divestments and debt restructuring at the level of IL&FS group, its subsidiaries or assets, according to the report the board submitted to the National Company Law Tribunal. The options can be deployed either individually or in a combination, it said.
In addition, the board led by Kotak Mahindra Bank chief executive Uday Kotak announced a salary cut for employees earning more than Rs 5 lakh a year, termination of contracts of 69 consultants and a halt on payment of final compensation settlement to the previous board.
The development comes almost two months after the company and its units started missing their debt repayments in late August. This roiled financial markets and prompted the government to move the tribunal for a new board earlier this month.
The new board, which has set forth a rescue time frame of six to nine months, expects some outcomes within 60 to 90 days after the tribunal consents to the plan.
The board has estimated that the group owes about Rs 91,000 crore, including Rs 57,000 crore to state-run banks.
According to the report, the group-level resolution would involve significant capital infusion and ensure continuity for employees and operating entities.
The board’s report says that it can also explore solutions for different verticals, for which a number of private equity and strategic players have already expressed interest.
The third option, of asset sale, may yield most value, the report said.
The board has hired Arpwood Capital Pvt. Ltd and JM Financial Services as financial and transaction advisers. Alvarez & Marsal has been appointed as the bankruptcy resolution professional.