Uday Kotak-led IL&FS board to meet on Thursday to device turnaround plan

 The newly-constituted board of the crisis-ridden IL&FS is likely to hold its maiden meeting Thursday to thrash out a turnaround plan, according to government sources.

The government seized the control of the debt-trapped company Monday in a Satyam Computer style takeover and superseded its board and appointed a new one led by banker Uday Kotak. The other members of the board include former Sebi chairman GN Bajpai, ICICI Bank non-executive chairman GC Chaturvedi, IAS officer and the director general of shipping Malini Shankar and Vineet Nayyar who turned around Satyam Computers for the government) and veteran auditor Nandkishore.

The finance ministry official said the priority for the board will to assess the company's financial situation and report the same to the government over the next 15 days. The government has also ordered an investigation by the Serious Fraud Investigation Office into the affairs of group and its over 160 subsidiaries, the source added. The official further said the board will look into long-term debts of the company and find out options to restructure the same.

"There is a need to take a look at the short-term and long-term debt of IL&FS and the viability of servicing them. The board will take a holistic view and offer a viable resolution plan," the official said. One of the focus areas for the board will be to find ways to raise cash by selling assets, said another source.

Even lenders to the debt-laden company are awaiting the outcome of the board meeting to take a decision on providing further funds to the company. "Any additional funding will depend on the resolution plan. Once the resolution plan and if its viable, a commercial call be taken," said one of the lenders to the company. The present shareholders of IL&FS, including LIC, SBI and others will also take a call on participating in the Rs 4,500-crore rights issue only after the outcome of the board meeting.

The Mumbai bench of the National Company Law Tribunal had Monday approved a government plan to supersede the board and appoint a new six-member board and management control. In a statement issued Monday, the finance ministry had said, "government stands fully committed to ensuring that needed liquidity is arranged for the IL&FS from the financial system so that no more defaults take place and the infrastructure projects are implemented smoothly." The city-headquartered engineering and long-term infra lending conglomerate owes over Rs 91,000 crore to lenders but has been on a defaulting spree since August 27.