Uday Kotak says IL&FS debt is over Rs 91,000 crore, has whopping maze of 348 entities, not just 169; worse than Satyam

The new Board of IL&FS headed by non-executive chairman Uday Kotak has revealed that the infrastructure financier has a maze of 348 entities. This means that the debt could far exceed the Rs 91,000 crore liabilities that was earlier estimated. Initial assessment had revealed that the financier has 169 subsidiaries.

Uday Kotak says IL&FS debt is over Rs 91,000 crore, has whopping maze of 348 entities, not just 169; worse than Satyam
The new Board of IL&FS headed by non-executive chairman Uday Kotak has revealed that the infrastructure financier has a maze of 348 entities. Image source: Reuters
By DNA Money Correspondent
Updated: Fri, Oct 05, 2018
10:06 am
ZeeBiz WebDesk
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The new Board of IL&FS headed by non-executive chairman Uday Kotak has revealed that the infrastructure financier has a maze of 348 entities. This means that the debt could far exceed the Rs 91,000 crore liabilities that was earlier estimated. Initial assessment had revealed that the financier has 169 subsidiaries.

Uday Kotak, the non-executive chairman of the Board, said at a press conference that “it is a complex structure with a number of subsidiaries. We need to assess the exact extend of liabilities. There are bank loans, NCDs, preference capital and there is off balance-sheet exposure and contingent liabilities. So in that sense it is far more complex than the Satyam case. The debt of Rs 91,000 crore was as of March 31, 2018. So that figure is a moving one.”

Calling the scale of the crisis in IL&FS much bigger than Satyam, Kotak said, “There are three to four options before the newly constituted Board and the Board will take steps to preserve the value. Unlike the Satyam case, they have not found any evidence of felony so far.”

“We are a legally constituted body unlike a shareholder led Board. The Board will meet frequently to prepare the roadmap” added Kotak.

The Board will ensure that an enabling environment is created so that the institution can carry on its work, said Vineet Nayyar, vice-chairman and MD of IL&FS.

The committee, in the meantime, has formed four committees the audit committee headed by board member Nand Kishore, nomination and a remuneration committee headed by Uday Kotak, a stakeholders’ committee headed by former Sebi chairman G N Bajpai, and a corporate social responsibility committee headed by ex-bureaucrat Malini Shankar.

“We have four different options before us so that we protect the intrinsic value of the institution. We will study those in detail and decide the best way forward,” said Kotak.

The Board is expected to meet frequently to work out a resolution plan that may involve sale of its non-core assets, a rights issue among others.

Source: DNA Money