The board of debt-laden Infrastructure Leasing & Financial Services Limited (IL&FS) has approved a Rs 4,500 crore rights issue to shore up capital and a proposal to put 25 projects on the block. The board also approved the re-capitalisation aggregating Rs 5,000 crore in group firm — IL&FS Financial Services, IL&FS Transportation, IL&FS Energy, IL&FS Environment and IL&FS Education.
LIC, the largest shareholder, which owns 25.3 per cent stake in the company, is expected to chip in with Rs 1,200 crore in the rights issue. LIC is also likely to subscribe any unsubscribed portion of the issue. Orix Corporation of Japan holds a 23.5 per cent stake. The rights issue of 30 crore equity shares at Rs 150 per share would be completed by October 30, 2018.
The board also approved the 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 company expects to complete its divestment plan over the next 12 to 18 months in a systematic and professional way to fulfill its commitments,” it said in a statement.
“The combination of capitalisation and debt reduction would serve to reduce leverage ratio significantly. IL&FS will be very well positioned to continue to support the government’s ambitious program for infrastructure sector, both as a sponsor manager and as an investment bank in mobilizing and deploying monies for the sector,” IL&FS said.