In a regulatory filing on Saturday night with respect to the disclosure on interest/principal payment on Non-Convertible Debentures (NCDs), RCap said that it will not be able to go ahead with asset monetisation, and hence repayment will be delayed.
Anil Ambani-controlled Reliance Capital (RCap) has said that it will be unable to timely service its debt following CARE Ratings downgraded its bond programme, which caused an accelerated repayment which otherwise was to occur in eight years in a phased manner, the company said, according to a PTI report. In a regulatory filing on Saturday night with respect to the disclosure on interest/principal payment on Non-Convertible Debentures (NCDs) RCap said that it will not be able to go ahead with asset monetisation, and hence repayment will be delayed.
CARE Ratings had downgraded RCap’s entire outstanding debt programme in September 2019 to default “CARE D” rating. The company, however, had called “completely biased, unwarranted and unjustified rating action”. CARE had downgraded the company’s long-term debt programme, market-linked debentures and subordinated debt because of interest payment delay. But RCap, a day after the rating action (September 21) claimed that there was no interest or principal payment overdue to any lender and that the agency’s downgrade action was unwarranted.
The rating downgrade led to “acceleration of various facilities and consequential demands for immediate payment of amounts that were otherwise due and payable in a phased manner over the next 8 years till March 2028, as per the original terms of debt,” RCap had said on October 11, 2019.
In its filing on Saturday, the company said that “it is expected that the debt servicing of the company in relation to the accelerated amounts and otherwise will be delayed.” Moreover, the company is prohibited to dispose off, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets, pursuant to November 20, 2019 order passed by the Delhi High Court, RCap said.
The Delhi High Court had restricted any sale, disposal or creation of any encumbrance on any assets of RCap. This also included it’s 4.28 per cent shareholding in Reliance Nippon Life Asset Management Ltd, PTI reported.
RCap has also been prohibited from transferring, alienating, encumbering or otherwise parting with the possession of assets owned by the company pursuant to proceedings initiated by Vistra ITCL (India) Limited, the Debts Recovery Tribunal vide its order dated December 3, 2019, according to the filing.
RCap had informed on Friday about being unable to pay interest of Rs 4.77 crore to HDFC Ltd and Rs 0.71 crore to Axis Bank dated May 31, 2020. It said that term loans of Rs 523.98 crore from HDFC Ltd and of Rs 100.63 crore from Axis Bank were taken. The total outstanding borrowings (from these two lenders) was Rs 662.99 crore. This included accrued interest up to May 31, 2020, it added. RCap’s total financial indebtedness stood at Rs 19,380.70 crore including accrued interest up to May 31, 2020.