(Adds details from board meeting, voting results at AGM)
By Promit Mukherjee
MUMBAI, Sept 29 (Reuters) - India's Infrastructure Financing and Leasing Services Ltd (IL&FS) ILFS.UL said on Saturday it will develop a "comprehensive" restructuring plan for the group to pay its liabilities, as it scrambles to cut its debt pile following a series of defaults and credit downgrades in recent weeks.
A series of defaults at IL&FS, a major infrastructure financing and construction firm in which India's largest insurer and biggest bank own stakes, have roiled India's financial markets over the past month and sparked fears of a crisis in the country's non-banking financial services sector. will develop a comprehensive detailed plan ... to demonstrate to creditors and shareholders that the intrinsic value of the group was sufficient in repaying liabilities," IL&FS Managing Director Hari Shankara said, following a board meeting on Saturday.
IL&FS used to be a sovereign-rated entity until early last month before it was hit by a series of downgrades by credit rating agencies, which pushed its debt ratings to junk within the span of a month. Saturday's board meeting at its headquarters in Mumbai, in a video message sent by the company to media, Shankara said the company will appoint a "specialist agency" to implement the plan.
A spokesman of the company separately said the company has appointed consultancy Alvarez & Marsal.
The company has filed an application seeking to block creditors from dragging it to a bankruptcy tribunal in India and will continue to pursue it, Shankara said, adding that this will help the company implement its restructuring and asset sales plan. LINE TALKS
IL&FS, which is under 910 billion rupees ($12.55 billion) of debt, has previously said 14 of its 25 assets had seen interest from buyers, and that it plans to raise up to 30 billion rupees through the asset sales.
Earlier in the day, following a closed-door annual general meeting with more than two dozen shareholders in Mumbai, Shankara, in another recorded message, said the company plans to seek funding from lenders to meet its credit obligations.
It is in talks with lenders to open a fresh line of credit, seek an extension for upcoming debt payments, or secure bridge financing to avoid further defaults, two of the shareholders, who own preferential shares of the company, said.
Its priority was to execute a successful rights issue, and sales of assets, which mostly include road construction projects.
Four shareholders Reuters spoke to said the company management was grilled with multiple questions on its credit obligations and timelines for asset sales - which some analysts have said could take months to over a year. The shareholders declined to be named due to the sensitivity of the matter.
IL&FS is often called a quasi-sovereign company because India's biggest insurer, the Life Insurance Corporation of India (LIC), owns a 25.34 percent stake in it.
LIC said on Friday it was willing to participate in the 45 billion rupees rights issue that IL&FS proposed in August.
The company also got shareholder approval on Saturday for the rights issue and for increasing the authorised share capital of the company from 15 billion rupees to 50 billion rupees, said a source associated with the company.
He did not wish to be named as the company was yet to announce the voting results.
The company's other large shareholders include the ORIX Corp of Japan, which has a 23.54 percent stake and the Abu Dhabi Investment Authority (ADIA) that has a 12.56 percent. India's biggest lender by assets, the State Bank of India SBI.NS , also has a 6.42 percent stake in IL&FS. ($1 = 72.5000 Indian rupees)