The debenture trustee of the cash-strapped Infrastructure Leasing & Financial Services Ltd (IL&FS) has not consented to the declaration and distribution of dividend on equity shares, leading the company to withdraw the agenda item relating to dividend declaration in the notice to the company's upcoming annual general meeting. This comes in the wake of defaults on debt obligations by the company.
“The company had defaulted in the payment of interest on non-convertible debentures. Purusuant to one of the covenants of the debenture trust deed, the company has to obtain prior permission of the Debenture Trustee (Centbank Financial Services Ltd) 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of dividend in respect of equity shares for FY2018 in the notice to the annual general meeting of the company has been withdrawn. The 31st AGM of IL&FS is scheduled on September 29.