IL&FS Defaults On Another Rs 150 Crore Of Unsecured Loans To SIDBI
IL&FS has further defaulted on inter-corporate deposits to the Small Industries Development Bank of India.
Infrastructure Leasing & Financial Services Ltd. has further defaulted on inter-corporate deposits worth Rs 150 crore to the Small Industries Development Bank of India, according to a banker aware of the development.
The total default on inter-corporate deposits by IL&FS now stands at Rs 450 crore, the banker told BloombergQuint requesting anonymity. IL&FS has repaid Rs 50 crore out of the Rs 500 crore worth of inter-corporate deposits placed by SIDBI, the banker said.
An inter-corporate deposit is essentially an unsecured borrowing between corporates.
The infrastructure financier is facing a special audit by the Reserve Bank of India after it failed to repay about Rs 350 crore worth of unsecured loans to SIDBI, in a series of defaults that started on Aug. 27. Ratings agency ICRA has already downgraded IL&FS' debt securities by several notches to junk grade citing liquidity pressure. In August, ICRA had downgraded the long-term rating on Rs 4,475 crore worth of IL&FS debt securities from AAA to AA+.
SIDBI has inter-corporate deposits worth Rs 500 crore with IL&FS and additional deposits worth Rs 500 crore parked with its non-banking finance company arm, IL&FS Financial Services Ltd., which are due in November.
IL&FS is in the process of monetising assets but progress has been slow. It's also trying to conclude a rights issue and secure a line of credit from its shareholders. The board is set to meet again on Sept. 15 to seek approval of a Rs 3,000 crore loan from its shareholders, Life Insurance Corporation of India and State Bank of India.