Mumbai, Sep 29 (PTI) In a major breather to the crippled infra lender and engineering group IL&FS, its largest shareholders LIC and Orix Corp and also SBI Saturday announced they would subscribe to the proposed Rs 4,500 crore rights issue of the company. Also Read - Despite 42 Covid-19 Deaths in the Country, Japanese Defy Social Distancing to Admire Cherry Blossoms

The announcement came at the annual general meeting (AGM) of the company that has been defaulting on debt obligations. Also Read - Twitter Advices Its 5000 Global Employees to Work from Home Amid Coronavirus Fears

Talking to reporters after the AGM, a shareholder, who wished not to be identified, said LIC, the single largest shareholder with over 25 per cent, and Japan’s Orix Corp, which owns a little over 23 per cent stake, would raise their ownership in the company by subscribing to the rights issue. Also Read - 119 Indians, 5 Foreigners Onboard Coronavirus-hit Japan Ship Land in Delhi on Air India Flight

Similarly, state-run lender SBI, too, has agreed to do so. SBI currently has the lowest stake, at around 7 per cent, in the company, he said.

It can be noted that the Reserve Bank of India (RBI) has reportedly asked LIC and Orix not to infuse more capital into the company, a systematically important NBFC, at a meeting held Friday.

The RBI had met the large shareholders of debt-laden Infrastructure Leasing & Finance Services (IL&FS) to decide on revival and capital infusion plans for the company, sources had said.

IL&FS Employees Welfare Trust holds 12 per cent in the company. The Abu Dhabi Investment Authority, HDFC and Central Bank of India hold 12.56 per cent, 9.02 per cent and 7.67 per cent, respectively, in the cash-strapped company.

The IL&FS group is facing serious liquidity crisis and has defaulted on interest payment on various debt repayments since August 27. It has over Rs 91,000 crore in debt at the consolidated level.

The company needs an immediate capital infusion of Rs 3,000 crore and is planning a Rs 4,500-crore rights issue.

On Thursday, IL&FS Financial Services defaulted on bank loans, including interest of Rs 284.5 crore to five banks.

The company also said it defaulted on repayments of Rs 103.53 crore of term deposit and Rs 52.43 crore of short-term deposit.

On September 24 and 26, IL&FS Financial Services had defaulted on repayment of commercial papers due on the respective days.

At a meeting held earlier this month, the key shareholders of the debt-ridden company, including LIC, SBI and HDFC, had kept a pre-condition for it to raise funds through its assets or non-core businesses, before any additional money could be pumped in.

On September 4, it came to light that IL&FS had defaulted on a short-term loan of Rs 1,000 crore from Sidbi, while its subsidiary has also defaulted Rs 500 crore dues to the development finance institution.

This is published unedited from the PTI feed.