Cash-strapped Infrastructure Leasing & Finance Services Ltd (IL&FS) has filed an application with the National Company Law Tribunal, Mumbai Bench, seeking certain reliefs in connection with the filing of a scheme of arrangement under Section 230 of the Companies Act, 2013, in respect of the company and its subsidiary, IL&FS Financial Services Ltd (IFIN).

IL&FS, the ultimate holding company of IFIN, filed the application with NLCT on September 24. The scheme will be prepared in compliance with applicable law and subject to the necessary consents of the shareholders, creditors, regulators and board of directors of the relevant entities.

IL&FS did not disclose the details of the scheme of arrangement. Section 230 of the Companies Act deals with the power to compromise or make arrangements with creditors and members where a compromise or arrangement is proposed — (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them.

The Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class  of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs.

The IL&FS group has been hit by a liquidity crisis leading to default by the parent on inter-corporate deposits to SIDBI and delay in repayments by IFIN on commercial papers. This has had a cascading impact as mutual funds with investments in these papers have pressed for the sale of non-convertible debentures of housing finance companies to meet redemption pressures.

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