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Debt-laden Infrastructure Leasing & Financial Services (IL&FS), on Monday, said it has received more than a dozen Expressions of Interest (EoI) for acquiring its stake in IL&FS Securities Services (ISSL) and ISSL Settlement & Transaction Services (ISTSL) from banks, private equity firms, and other financial services companies.
“IL&FS has received a strong response to its monetisation process, initiated a fortnight ago, towards developing a resolution plan(s) for the IL&FS Group,” the non-banking financial company (NBFC) said in a statement, adding that its newly-appointed board is scrutinising the EoIs for eligibility.
The last date for receipt of EoIs was November 23. The statement said that interested bidders who qualify will now be invited to review information on the business to enable them to submit commercial bids.
The beleaguered infrastructure finance company had invited EoIs for a potential acquisition of 81.24 per cent of the issued and outstanding equity shares owned by it in ISSL, along with 100 per cent of the issued and outstanding equity shares owned by it in ISTSL.
The other shareholders of ISSL are: IL&FS Employee Welfare Trust (9.01 per cent stake); Orix Corporation, Japan (4.75 per cent); and Croupier Prive Mauritius (5 per cent).
As per the EoI, IL&FS Employee Welfare Trust, Orix Corporation and Croupier Prive Mauritius, are expected to participate in the proposed sale, subject to them agreeing to the terms being offered for their respective shares in ISSL.
ISSL is engaged in providing professional clearing member (PCM) services in the derivatives segment, custodian-designated depository participant services, domestic fund accounting, and other financial services.
ISTSL is engaged in providing professional clearing member (PCM) services in the commodities derivatives segment. It is a wholly-owned subsidiary of IL&FS.
IL&FS said any binding transaction for the sale of assets, as well as the resulting resolution plan(s), will be subject to requisite approvals (including the National Company Law Tribunal or NCLT) before the transactions are concluded.
Asset monetisation
The IL&FS group, which has a debt obligation of ₹91,000 crore, said it will shortly be launching the asset monetisation process for sale of many other assets as part of its ongoing resolution process.
IL&FS, and some of its arms, have defaulted on debt obligations in the last couple of months. This default has shaken up the financial system, forcing the government to intervene.
As per the ‘Report on Progress and Way Forward’, which was submitted by the new board of IL&FS to the NCLT on October 31, on account of massive mismanagement of public funds by the erstwhile board of IL&FS Group and on the grounds that the affairs of IL&FS were being conducted in a manner prejudicial to public interest, the Ministry of Corporate Affairs (MCA) had sought suspension of the previous board of IL&FS and appointed the new board.
NCLT, Mumbai, passed an order on October 1, granting the interim prayer of suspending the existing board of directors of IL&FS as on October 1, 2018, and reconstituting the same with the six persons proposed by the Union of India.
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