IL&FS Financial Services, part of India`s Infrastructure Leasing & Financial Services (IL&FS), said on Thursday it missed repayments on a host of bank loans and some term deposits due this month.
IL&FS is a major Indian infrastructure finance and construction company, which has built up big debts and is now facing a credit crunch. As a result, Indian authorities are trying to calm market fears that IL&FS`s troubles could trigger a crisis in the wider non-banking financial sector.
IL&FS Financial Services said it was unable to service its obligations for bank loans due on Sept 12, 16, 24 and 26, a term deposit due Sept 25 and a short-term deposit due Sept 27.
The Economic Times reported on its website that the government has said it would look into helping to complete projects undertaken by the parent IL&FS and could also buy some of its healthy assets. (https://bit.ly/2xCEsRG)
IL&FS is expected to hold its annual general meeting with shareholders and its board meeting on Saturday to weigh options for a potential capital infusion plan.
Its board has already approved raising funds via a 45 billion rupee rights issue and a 30 billion rupee debt-reduction plan through asset sales.
India`s central bank is set to meet the large shareholders of IL&FS on Friday, CNBC-TV18 reported on Thursday, citing sources familiar with the matter.
IL&FS did not repond to request for comments outside regular business hours.
The company`s top shareholders include India`s largest state-run insurer, Life Insurance Corporation (LIC), Japan`s Orix Corp, IL&FS Employees Welfare Trust and Abu Dhabi Investment Authority.
LIC Chairman V.K. Sharma told reporters on Tuesday that the insurer would not allow IL&FS to collapse. All options, including increasing LIC`s stake in IL&FS, are open, Sharma said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
09:14 PM IST