Business Today
Loading...

IL&FS board submits revival plan; fires 69 consultants, announces 10% salary cut for some employees

The new management board, headed by Kotak Mahindra Chairman Uday Kotak, has said they will need at least six to nine months to implement the complete resolution plan.

twitter-logo BusinessToday.In   New Delhi     Last Updated: November 30, 2018  | 19:33 IST
IL&FS board submits revival plan; fires 69 consultants, announces 10% salary cut for some employees

The new management of the troubled IL&FS has swung into action, putting in place a comprehensive resolution plan to revive the company. The management has asked the IL&FS shareholders to pump in more money in the beleaguered organisation and has sought divestment of some of its assets. Other measures presented before the National Company Law Tribunal by the board include liquidation of some IL&FS companies, and debt structuring at the group level and business vertical level, reported Business Standard.

Apart from this, a salary cut of 10 per cent has been initiated against those earning over Rs 50 lakh and more. All boards and their committee members will also take a hit in their sitting fees. As part of an austerity measure, the company has fired around 69 consultants so far, the daily reported. The new management board, headed by Kotak Mahindra Chairman Uday Kotak, has said they will need at least six to nine months to implement the resolution plan.

So far, the new board has taken full control of all the cash registers of IL&FS. While law firm Alvarez & Marsal is taking care of everyday cash flow, the transactions above the value of Rs 1 crore are being approved by the company managing director. Investment banking companies Arpwood Capital and JM Financial have been roped in to advise the company on big transaction matters. Besides, the new board wants to perform a consolidated audit of the company for the past two quarters of this financial year.

Also read: IL&FS board submits revival plan; fires 69 consultants, announces 10% salary cut for some employees

On October 12, the seven-member board, headed by veteran banker Uday Kotak, had appointed nominee directors for eight of IL&FS' subsidiaries. Apart from Kotak, Rajan and Nayyar, other board member includes former Sebi chairman GN Bajpai, ICICI Bank non-executive chairman GC Chaturvedi, IAS officer and the director general of shipping Malini Shankar, and veteran auditor Nand Kishore.

As of March 2018, IL&FS owed over Rs 91,000 crore to banks and other creditors and has been downgraded to junk status by rating agencies after it defaulted on debt repayments due to a liquidity crisis.

It needs an immediate capital infusion of Rs 3,000 crore and is also planning Rs 4,500-crore rights issue. On Wednesday, S&P Global Rating agency also said that there's a great 'trust deficit' in the Indian markets, which has emerged after defaults by a major non-banking finance company.

"India's financial markets are facing a trust deficit. The disruption could put a strain on weaker companies as well as finance companies," S&P Global Ratings credit analyst Geeta Chugh said, reported PTI. The agency said it would put an additional burden on smaller NBFCs, who would face a great difficulty in seeking short-term borrowings.  

Edited by Manoj Sharma

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close