Mumbai:The new board of Infrastructure Leasing and Financial Services (ILFS) submitted a plan to revive the debt-laden firm to a company law tribunal on Wednesday, paving the way to a potential resolution of the group's future.The government this month took control of ILFS, a major infrastructure financing and development company, after it defaulted on some of its debt, triggering fears of contagion across the country's financial system."It is a dream and hope blueprint for revival," Sanjay Shorey, Director for Legal Prosecution in the Ministry of Corporate Affairs (MCA), told the tribunal.The MCA is representing the government and the new board at the National Company Law Tribunal (NCLT)."A universe of options are to be explored.
There is no single strategy for revival," Mr Shorey said.He said the new board of ILFS was looking at three strategies: an outright sale of the entire ILFS group, sales of its subsidiaries or assets.The company later said in a statement after the tribunal hearing that the options could broadly involve significant capital infusion, divestments and debt restructuring at ILFS group, its subsidiaries and asset sales.The ILFS defaults have triggered sharp falls in the domestic stock and debt markets amid fears of risk in the rest of the country's financial sector.Earlier in the day, both Infrastructure Leasing Financial Services and ILFS Transportation Networks said they were unable to service their non-covertible debenture interest payments due on October 30 and October 31, respectively, due to insufficient funds.The string of defaults by ILFS led to a series of credit rating downgrades on the company to junk.Mr Shorey said the officials appointed by the new board have found discrepancies on how the previous board and management had conducted its business.A preliminary analysis of the financial statements of ILFS noted that outstanding loans of the company were in excess of the permissible limit set by India's central bank, Mr Shorey told the tribunal."The new board is unable to validate whether transparent process was used by the earlier board to monetise assets," he added.The NCLT told the MCA that the holding company will have to make all its 346 subsidiaries part of the resolution roadmap within 15 days.The new board will follow due processes in the finalisation and implementation of the plans and expects to complete the process, in stages and parts, in the next six to nine months subject to market and economic conditions, ILFS said.The court will hear an update on the plans on December 3.