RHFL defaults on interest payment of Rs 31.32 crore

By: |
May 25, 2021 8:12 AM

The list of lenders includes Bank of Baroda, Punjab National Bank, ICICI Bank, HDFC Bank, Canara Bank, Bank of India and Indian Bank, among others.

As per Insolvency and Bankruptcy Code (IBC), the committee of creditors (CoC) should approve a resolution plan with a minimum 66% votes.As per Insolvency and Bankruptcy Code (IBC), the committee of creditors (CoC) should approve a resolution plan with a minimum 66% votes.

Reliance Home Finance (RHFL) has defaulted on payment of Rs 31.32-crore interest to 27 lenders on April 30, the mortgage lender disclosed to stock exchanges on Monday.

The list of lenders includes Bank of Baroda, Punjab National Bank, ICICI Bank, HDFC Bank, Canara Bank, Bank of India and Indian Bank, among others. The company has already failed to make repayments to lenders amounting to Rs 6,206 crore till March 31, 2021. Lenders had earlier signed an inter-creditor agreement (ICA) to resolve Reliance Home Finance as per June 7, 2019, circular of the Reserve Bank of India. However, no final resolution has been reached so far.

Reliance Home Finance has also disclosed that it has net cash (including cash equivalent, liquid mutual fund investments, fixed deposits, etc.) of more than Rs 1,800 crore. The company has cited legal hurdles for the delay in debt servicing. “The delay in debt servicing is due to prohibition on the company to dispose of, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets, pursuant to order dated November 20, 2019, passed by the Hon’ble Delhi High Court in the matter of OMP(I) COMM. 420/2/019,” Reliance Home Finance said.

The net loss of the company widened to Rs 445 crore in the March quarter (Q4FY21), compared to Rs 248-crore loss in the same quarter in FY20. The interest income of the lender halved to Rs 135 crore during Q3FY21, compared to Rs 271 crore during the March quarter last year. Similarly, total income during the March quarter declined 42% year-on-year (y-o-y) to Rs 162 crore.

Chartered accountants of the company Dheeraj and Dheeraj said, “The company’s ability to meet its obligation dependent on material uncertain events including restructuring of loan portfolio and the resolution of its debt under the ICA and revival of housing finance business.”

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