LIC Mutual Fund Says IL&FS Pays Off Dues Of 300 Crore Rupees
Infrastructure Leasing & Financial Services (IL&FS) has paid all its remaining balance of Rs 300 crore to LIC Mutual Fund, the fund house said on Friday. "We at LIC Mutual Fund would like to reiterate our earlier statement that there was no default in our LIC MF (mutual fund) schemes. We at LIC Mutual Fund would like to confirm having received all our interest payments and/or maturity proceeds from IL&FS group entities," LIC Mutual Fund said in a statement. IL&FS has been in the eye of a storm for having defaulted on repayments, triggering a turmoil in the NBFC sector.
With the receipt of this amount, all of IL&FS' dues towards LIC Mutual Fund are cleared, the fund house said on Friday.
Even as the default of IL&FS, volatility in bond market and rupee depreciation, among others, created a liquidity deficit in the market of almost Rs 1.5 lakh crore, LIC Mutual Fund reiterated that it has "put paramount importance on risk controls that helped us during the market turmoil faced in last 1 month".
"We would also like to take this opportunity to highlight that debt schemes of LIC MF have been consistent performers for last few years," it added.
IL&FS is a sprawling non-bank institution that used its highly rated paper to chalk up $12.5 billion of debt, which it funnelled into the financing of long-term assets like roads, townships and water-treatment plants.
Out of $12.5 billion, $500 million is due over the next six months, according to a report by Bloomberg. The group has only $27 million of liquidity at hand. This has led to a debt-repayment crisis that threatens to engulf banks, mutual funds and insurance and pension funds.
Beginning August 27, the diversified IL&FS group, which is facing cash crunch has been defaulting on payments, reported news agency Press Trust of India. On Thursday, it told the regulators that it had defaulted on seven payments.
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