Sharma, along with State Bank of India Chairman Rajnish Kumar and Central Bank of India Managing Director Pallav Mohapatra, met Economic Affairs Secretary Subhash Garg in the finance ministry on Friday to discuss options to bail out IL&FS.

Earlier in the day, the Reserve Bank of India also met IL&FS shareholders in Mumbai. The meeting was attended by IL&FS Chairman Hemant Bhargava and top officials of Orix Corporation of Japan. The meeting was called by the RBI to discuss how the shareholders plan to help IL&FS to tide over the crisis. Speaking to reporters before the meeting in New Delhi, Garg said the government was monitoring the situation closely and would ensure there is no undue impact on the markets due to IL&FS.

“IL&FS is a large company in infrastructure. It has a lot of connection with government departments and does a lot of public-private partnership projects and therefore is an important, significant entity. The Centre will take measures to see that there is no undue impact on what happens in IL&FS,” Garg said.

Sharma said around Rs 700 billion could be recovered from IL&FS’ asset sales, and the shareholders were trying to find a solution to the rest of the Rs 910 billion debt. When asked if the public sector behemoth would buy more stake in IL&FS, Sharma said all options were on the table.

IL&FS, which is hosting its shareholders’ meeting in Mumbai on Saturday, has sought to raise Rs 45 billion from its shareholders to meet its liquidity crisis.

LIC owns 25.34 per cent in IL&FS and HDFC 9.02 per cent. Central Bank of India (7.67 per cent) and State Bank of India (6.42 per cent) own small stakes in IL&FS, which defaulted on debt repayments since mid-September. The Indian institutions jointly hold around 49 per cent in IL&FS while Orix Corporation, Japan, owns 23.54 per cent and the Abu Dhabi Investment Authority 12.56 per cent.

The rights issue will help the company to meet its immediate demand for funds from its several subsidiaries which have also defaulted to loans. IL&FS is raising shares at Rs 150 a share. Some of the shareholders like Central Bank of India are not interested at investing at a premium for the company. With LIC and State Bank of India agreeing to pump in more money into the company, insiders said the institution will be able to meet its commitments. But most of IL&FS lenders are gearing up for a haircut. “A lender can expect a 30-40 per cent haircut,” said a banker.

IL&FS has moved the NCLT on Monday “seeking certain reliefs” in connection with filing of scheme of arrangement and said the scheme will be prepared in compliance with applicable laws and subject to necessary consents of the shareholders, creditors and board of directors of the relevant entities, the company said in a filing with the Bombay Stock Exchange. The NCLT is yet to hear the petition.

Sections 230 to 240 of the Companies Act, 2013, contain provisions on compromises, arrangements and amalgamations, that covers compromise or arrangements, mergers and amalgamations, and corporate debt restructuring. After an application is filed with the National Company Law Tribunal, the tribunal calls for a meeting of its shareholders and lenders and then the company’s debt restructuring plan will be put to vote. The shareholders of IL&FS will be informed about the debt recast plan on Saturday at the annual general meeting of shareholders. One of IL&FS’s Small Industries Development Bank of India (Sidbi) has also moved the NCLT Mumbai against IL&FS seeking its money back. IL&FS owes close to Rs 10 billion to Sidbi.

The subsidiaries which have moved the NCLT include IFIN, ITNL, IL&FS Energy Development and IL&FS Engineering & Construction Ltd. The other companies include roads and construction companies.