The newly appointed board of cash-strapped Infrastructure Leasing and Financial Services (IL&FS) in its second meeting Friday initiated austerity measures for personnel and operating expenses.
The seven-member board, headed by veteran banker Uday Kotak, also appointed nominee directors for eight of IL&FS' subsidiaries, and had detailed deliberations in relation to the road map ahead, according to a statement.
"The board initiated several austerity measures related to personnel and operating expenses," the company said in the statement after the Friday's meeting.
The firm and its subsidiaries have defaulted on several debt repayments recently due to liquidity crisis. It needs an immediate capital infusion of Rs 3,000 crore and is also planning a Rs 4,500-crore rights issue.
The company as of March 2018 owed over Rs 91,000 crore to banks and other creditors.
On October 1, the government superseded the board of IL&FS and appointed a new board, with Kotak as its executive chairman.
The board has nominated directors from among the present board members – 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, veteran auditor Nandkishore and CS Rajan, former chief secretary of Rajasthan – based on the recommendations of the Nominations and Remuneration Committee on eight subsidiaries of IL&FS.
It has appointed Nayyar, Kishore and Shankar as the nominees on IL&FS Financial Services. The new nominees on IL&FS Transportation Networks are Nayyar and Rajan, according to the statement.
Kishore will be the nominee on IL&FS Environmental Infrastructure & Services and IL&FS Technologies.
The new nominees on IL&FS Energy Development are Chaturvedi and Nayyar.
The board appointed Shankar as the nominee on Tamil Nadu Water Investment Company.
Pursuant to the recommendations of the audit committee, which is headed by Kishore, the board said it would require a full audit of the standalone and consolidated accounts as on September 30, 2018.
It also approved formation of a core operating committee under Nayyar, who is also the vice-chairman and managing director of IL&FS.
The board, after it's first meeting on October 4, had said it is required to give a roadmap for the company by October 31, to NCLT.
Speaking to reporters after the first board meeting, Kotak had hinted that the crisis at the infra lending and engineering conglomerate was much more complex than earlier thought as the number of its subsidiaries and associates have more than doubled to 348.
"We undertook an initial assessment of the ground reality and the way forward. We'll meet frequently to implement the directions of NCLT and to prepare a roadmap and turnaround," Kotak had said.
He had also said that the resolution will take some time and the board's focus is to preserve the fair value of the assets and the enterprise to the maximum extent.