New board of IL&FS addresses a press conference in Mumbai. (Photographer: Sajeet Manghat/BloombergQuint)

IL&FS Board Appoints Three Advisors To Develop Resolution Plan

The newly constituted board of the Infrastructure Leasing and Financial Services Ltd. today appointed three advisors to formulate and execute a resolution plan for the debt-ridden company.

Arpwood Capital and JM Financial have been appointed as financial and transaction advisors, while Alvarez and Marsal have been elevated as the restructuring advisor to the company’s board, according to a release.

The financial and transaction advisors, along with other advisors, will guide the new board on solutions for resolution for the crisis-burdened IL&FS. The two agencies will also undertake valuations across divestment and monetisation, it said.

Alvarez and Marsal, in their power as the restructuring advisor, would assist the board in maintaining strict controls and managing liquidity on a day-to-day basis at all levels in the group, it said.

It will also evolve a resolution plan and management of stakeholders with regards to the resolution at the time of implementation, the release said.

At a meeting of the board of directors of IL&FS held last week, the board had considered it important to harmonise all asset monetisation activities, including ongoing initiatives, and to undertake the same in a transparent and speedy manner aligned with the broader objective of optimising the interest of different stakeholders.
IL&FS Release 

It can be noted that the previous board had also appointed Alvarez and Marshal to formulate a turn-around strategy.

IL&FS and its subsidiaries have defaulted on several debt repayments due to a liquidity crisis. It needs an immediate capital infusion of Rs 3,000 crore and is also planning a Rs 4,500-crore rights issue.

Also read: The IL&FS Effect: Indian Financiers Brace for Tighter Regulation

The company, as of March 2018, owed over Rs 91,000 crore to banks and other creditors. On Oct. 1, the government superseded the board of IL&FS and appointed a new board, with banker Uday Kotak as its executive chairman.

Also read: India’s IL&FS Built a Road to Riches for Some

In its second meeting held on Oct.12, the new board had appointed nominee directors for eight of IL&FS subsidiaries. It also announced several austerity measures related to personnel and operating expenses.

After the first board meeting on Oct. 4, Kotak had hinted that the crisis at the infra lending and engineering conglomerate was much more complex than earlier thought as the number of its subsidiaries and associates have more than doubled to 348. He had also said the resolution will take sometime and the board’s focus is to preserve the fair value of the assets and the enterprise to the maximum extent.

The board after it’s first meeting had said it was required to give a road map for the company to the National Company Law Tribunal by Oct. 31.

Also read: IL&FS Needs Rs 100 Crore Every Month To Stay Afloat, Says Official