IL&FS Group's Board meets to seek immediate financial support: Sources
Mumbai, Sep 7 : The Board of cash-strapped IL&FS has sought immediate financial support from its key shareholders, sources said.
Accordingly, the Board met here on Friday and sought around Rs 3,000 crore loan from key shareholders including Life Insurance Corporation of India (LIC).
Besides, sources said the Board informed the shareholders of the brewing financial crisis at the company and the need to raise additional funds.
As per an earlier statement of the company, the Board had approved a plan to approach shareholders for support to the extent of Rs 9,000 crore.
On August 29, the company's board, among other fund-raising plans, approved a Rights Issue of 30 crore equity shares at Rs 150 per share aggregating to Rs 4,500 crore to shore up its capital and the process would be completed by October 30, the company had said in a statement.
"As on March 31, 2018, IL&FS net worth was Rs 7,400 crore. In addition, the Board approved the re-capitalization of Group companies to the extent of Rs 5,000 crore in IL&FS Financial Services, IL&FS Transportation, IL&FS Energy, IL&FS Environment, and IL&FS Education," the company said.
"The Board also approved the Company's specific asset divestment plan based on which IL&FS expects to reduce its overall debt by Rs 30,000 crore. Out of a portfolio of 25
projects identified for sale, firm offers have already been received for 14 projects."
The August 29 statement had also said that the company expects to complete its divestment plan over the next 12 to 18 months in a systematic and professional way to fulfil its commitments.
The group has around Rs 1 lakh crore worth of debt on its books.
As on March 31, 2018, LIC and ORIX Corporation Japan were the largest shareholders in IL&FS with their stake holding at 25.34 per cent and 23.54 per cent respectively, while Abu Dhabi Investment Authority (ADIA), HDFC, CBI and SBI stake holdings are at 12.56 per cent, 9.02 per cent, 7.67 per cent and 6.42 per cent respectively.
Last month, ICRA had downgraded the long-term rating for IL&FS.
"The rating revisions take into account the company's elevated debt levels owing to the funding commitments towards Group ventures," ICRA had said in a note on August 7.
"While IL&FS has recognised opportunistic asset monetisation as a key strategic initiative, the actual progress on the same has hitherto been slow, resulting in high gearing for the company, albeit within the regulatory limit."
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Karnataka Assembly passes bill on Palace Grounds amid opposition protest
Bengaluru, Mar 6 (PTI): The Karnataka Assembly on Thursday passed the Bangalore Palace (Utilisation and Regulation of Land) Bill, reaffirming state ownership over 472 acres and 16 guntas of land here, amid protests by the opposition BJP.
During the discussion, Karnataka Law and Parliamentary Affairs Minister H K Patil said the state government would have to provide Rs 200 crore worth of Transfer of Development Rights (TDR) for each acre of land, which means that for 15 acres, Rs 3,000 crore worth of TDR would be issued.
“If we accept it, then this 2-km stretch of road will become the costliest road in the world. If we accept it then how are we going to develop the city in later stages? How will you carry out development works?” asked Patil.
He also pointed out that this question was raised not only under the Congress government but also during the previous BJP regime.
However, the BJP-led cabinet has opposed the project.
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“Suppose we agree to it then, what will be the valuation of the 472 acres? It will be lakhs and lakhs of crores of rupees. Can we accept?” Patil wondered.
The Minister said the government had previously exercised its executive powers to issue an ordinance, which was approved by the Governor. Now the government is bringing a bill with two amendments.
“In this bill, we have made provisions either to develop or drop the road development work,” Patil explained.
However, BJP state president B Y Vijayendra and BJP MLA Arvind Bellad opposed the move, alleging that the government was targetting Yaduveer Krishna Datta Chamaraja Wadiyar, the scion of the Mysuru royal family, and the BJP MP from Mysuru-Kodagu constituency out of political vendetta.
“We talk of 472 acres of Mysuru Maharaja but here there are many Maharajas who too own 400 acres, 500 acres and thousands of acres of land, which is known to everyone,” Bellad said.
He slammed the Congress government, saying political power should not be misused for personal vendetta.
“Why (the then Deputy Chief Minister) Siddaramaiah brought the law in 1996 pertaining to the Bangalore Palace? Why are you setting eyes on the Bangalore Palace?” he asked.
Vijayendra charged that Wadiyar won the election on BJP ticket so the state government realised that it should acquire it.
“This bill has been brought for political vengeance. We are not discussing whether Rs 3,000 crore is exorbitant or not but the moment Yaduveer became MP, the state government woke up. You should be ashamed. This house should not be used for political vendetta,” he said.
Intervening, Minister Priyank Kharge said Vijayendra should not have raised it because the intention behind building the road was noble.
According to him, the BJP too had the same plan when it was in power.
He sought to know whether thousands of crores of rupees be spent on a road which should have cost significantly less.
In response, BJP MLA B A Basavaraj (Byrathi) said issuing TDR will not be a burden on the state government and appealed to the ruling Congress to reconsider its stance.
Minister Ramalinga Reddy too explained that the Karnataka government acquired the entire land way back in 1996.
The Mysuru royal family went to the High Court, which gave ruling in favour of the state government. The royal family then approached the Supreme Court, where the case is still going on, the Minister pointed out.
“The final judgment is pending in the SC to decide whether the acquisition was right or wrong. If the SC says it’s the royal family’s property then let it be so. If the order is in the state government’s favour then we can take a decision. The bill is only about it,” Reddy explained.
Speaker U T Khader then called for a voice vote and the bill was passed by the Assembly amidst opposition BJP’s discontent.
