As part of its prima facie assessment of the crisis, the Board is likely to consider a possible solution and whether any short-term measures can be taken immediately
The newly-appointed Board of the beleaguered financial firm Infrastructure Leasing & Financial Services Ltd (IL&FS) is likely to hold its first meeting on Thursday in Mumbai. The seven-member Board, led by billionaire banker Uday Kotak, will make a first-hand assessment of the financial situation and the immediate needs of the company, sources said.
"The Board is scheduled to meet this afternoon after getting some regulatory approvals. The agenda will be to make a first-hand assessment of the crisis," sources said. The government has to submit the Board's assessment report before the NCLT by October 8.
As part of its prima facie assessment of the crisis, the Board is likely to consider a possible solution and whether any short-term measures can be taken immediately.
More members may be inducted to the Board, sources said, adding, the Board will take a call on it.
After the first meeting, the Board will work on an action plan, sources said. The new board is likely to submit a new probable revival action plan within a fortnight, sources added.
The claims of the government-owned entities due on IL&FS are likely to be settled by the debt-laden firm soon.
"The new Board will immediately start looking at honouring short-term payment obligations. The Board will not allow the company to default on any repayments. As far as long-term borrowings are concerned, they are likely to be rolled over. The government-owned banks may restructure outstanding debts," sources said.
The Board will also look at the possibility of settling arbitration cases out of court. "Some public sector banks are likely to consider restructuring debts of the company. The Board will take a call on whether the company can expand or take new orders," sources said.
Meanwhile, the government is likely to provide immunity to the new Board through NCLT. The government may look at providing immunity to the new Board, similar to the support extended to the then new Board of Satyam.
Former bureaucrat CS Rajan was appointed to the Board of IL&FS on Wednesday. The other members of the Kotak-led Board are former vice chairman of TechMahindra Vineet Nayyar, former Sebi chairman GN Bajpai, ICICI Bank chairperson GC Chaturvedi and former bureaucrats Malini Shankar, Nand Kishore and CS Rajan. The erstwhile Board of IL&FS was superseded by the government-appointed Board on Monday after a court order. The government had moved National Company Law Tribunal (NCLT) seeking to remove the erstwhile Board citing mismanagement by it.
IL&FS Group's outstanding borrowings are at Rs 91,000 crore. There was a fear of the ripple effect of further debt defaults by the debt-ridden company and its subsidiaries could have on the banking system, non-banking financial companies and mutual funds.
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