Comments
Following the debenture trustee’s refusal to give consent to the declaration and distribution of dividend on equity shares, cash-strapped Infrastructure Leasing & Financial Services (IL&FS) withdrew the agenda item relating to dividend declaration in the notice to the company’s upcoming annual general meeting.
This move comes in the backdrop of defaults on debt obligations by the company and rating downgrades by credit rating agencies.
“The company had defaulted in the payment of interest on non-convertible debentures. Pursuant to one of the covenants of the debenture trust deed, the company has to obtain prior permission of the Debenture Trustee (Centbank Financial Services) for declaration and distribution of dividend on equity shares.
“The Debenture Trustee.. .has not consented to the declaration and payment of dividend on equity shares,” IL&FS said in a communication to the exchanges.
As a result, the agenda with respect to declaration of dividend on equity shares for FY18 in the notice to the annual general meeting has been withdrawn. The 31st AGM of IL&FS is scheduled for September 29.
The board of directors of the company, at its meeting held on August 29, had recommended a final dividend of 10 per cent (₹1 an equity share) on the paid-up equity share capital of the company for financial year ended March 31, 2018. The dividend payment was subject to approval by shareholders at the ensuing AGM.
The board of directors of the company, at its meeting held on April 26, 2017, had recommended a final dividend of 42.50 per cent (₹4.2 an equity share) on the paid-up equity share capital of the company for financial year ended March 31, 2017, and shareholders of the company approved the same at the 30th AGM held on September 26, 2017.
Meanwhile, IL&FS Financial Services (IFIN), a subsidiary of IL&FS, said it has been unable to service its obligations relating to bank loans, including interest (aggregating ₹284.5 crore), term deposits (₹103.53 crore) and short-term deposits of ₹52.43 crore.
The original due dates for servicing these obligations ranged from September 12 to September 27.
IL&FS Engineering and Construction Company, another subsidiary of IL&FS, has informed the exchanges that Debabrata Sarkar (former Union Bank of India Chairman & Managing Director), Non-Executive Independent Director of the company, has tendered his resignation from the directorship of the company with effect from September 26, due to various other professional commitments.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.