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.)