INSUBCONTINENT EXCLUSIVE:
By Ameya KarveTroubled Indian shadow bank Infrastructure Leasing Financial Services Ltd., whose recent debt defaults sparked concern about
contagion in the nation’s financial markets, secured a lifeline after shareholders approved its plans to raise money through debt and
equity.
Stockholders green-lit ILFS’s plans to raise as much as 150 billion rupees ($2.1 billion) through a non-convertible debt issue,
hike the firm’s borrowing limit by 40 percent to 350 billion rupees and increase its share capital to enable a rights offering, the
company said in a filing.
The firm finances infrastructure projects across the world’s fastest-growing major economy and is considered
systemically important by the central bank
Its defaults on commercial paper from August sparked concern among households holding mutual funds invested in such debt, and forced banks
and mutual and pension fund managers to brace for further losses.
ILFS’s investors include biggest Indian insurer Life Insurance Corp.,
top lender State Bank of India, largest mortgage lender Housing Development Finance Corp
Sharma, the chairman of biggest shareholder LIC, on Friday said the beleaguered group can raise 600 billion rupees by selling assets.
ILFS
on Saturday appointed Alvarez Marsal to devise a restructuring plan that will be implemented upon approval by the board and stakeholders.
