(Removes extra word in headline)
MUMBAI, Sept 28 (Reuters) – Indiaâ€™s Life Insurance Corporation (LIC), the largest shareholder in debt-ridden Infrastructure Leasing & Financial Services (IL&FS), is open to participating in a rights issue, the insurerâ€™s chairman V.K. Sharma said on Friday.
IL&FS is a major Indian infrastructure finance and construction company, which has built up big debts and is now facing a credit crunch.
IL&FSâ€™s board in August approved raising funds via a 45 billion Indian rupee ($621 million) rights issue and a 30 billion rupee debt-reduction plan through asset sales.
LIC, Indiaâ€™s largest state-run insurer, was open to all options to help rescue the firm, including participating in a rights issue, Sharma told reporters at the finance ministry on Friday.
The insurer might also look at raising its equity stake in IL&FS, subject to regulatory permission, Sharma said, adding that the value of assets of IL&FS was 600 billion rupees.
Sharma and Ranjish Kumar, chairman of State Bank of India, were at the ministry to meet Indiaâ€™s economic affairs secretary to discuss the IL&FS crisis, a source familiar with the matter said.
IL&FSâ€™s other major shareholders include Japanâ€™s Orix Corp and the Abu Dhabi Investment Authority up to the end of the financial year to March 2018, according to the companyâ€™s website. LIC held more than 25 percent at the end of March.
IL&FS is expected to hold its annual general meeting with shareholders and its board meeting on Saturday.
Separately, IL&FS Financial Services, a subsidiary of IL&FS, said it defaulted on commercial papers, a term loan and missed interest payments on non-convertible debentures all due on Friday.
On Thursday, the unit had said it missed repayments on a host of bank loans and some term deposits due this month.
$1 = 72.5050 Indian rupees
Reporting by Manoj Kumar in New Delhi and Abhirup Roy in
Mumbai. Editing by Jane Merriman and Elaine Hardcastle