The company has cited legal hurdles for not being able to proceed with its asset monetisation, which in turn resulted a delay in the debt servicing.
Reliance Capital has defaulted on term loan payments to Housing Development Finance Corporation (HDFC) and Axis Bank for the tenth month in a row, as per stock exchange disclosures.
The company could not make interest payment of Rs 4.77 crore to HDFC and Rs 71 lakh to Axis Bank on October 30.
The company had earlier missed 9 installments of HDFC and Axis Bank from January 31 to September 30 this year, according to the stock exchange disclosures made by the company.
The non-bank lender had taken a loan of Rs 524 crore from HDFC and Rs 101 crore from Axis Bank. While HDFC charged interest rates between 10.6% to 13%, Axis Bank had extended the loan to Reliance Capital at 8.25% per annum.
Reliance Capital’s total outstanding from banks and financial institutions, including accrued interest stood at Rs 690 crore. However, the total financial indebtedness of Reliance Capital remained at Rs 20,077.14 crore as on October 31, 2020.
The company has cited legal hurdles for not being able to proceed with its asset monetisation, which in turn resulted a delay in the debt servicing.
“The company is unable to proceed with asset monetisation resulting in delay in debt servicing, due to prohibition on the company to dispose off, alienate, encumber either directly or indirectly or otherwise part with the possession, of any assets except in the ordinary course of business such as payment of salary and statutory dues, pursuant to order dated November 20, 2019 passed by the Hon’ble Delhi High Court, and Orders dated December 3, 2019 and December 5, 2019 passed by the Hon’ble Debts Recovery Tribunal, Mumbai and Order dated November 4, 2020 passed by the Hon’ble Bombay High Court, ” Reliance Capital said.
Reliance Capital had reported a consolidated net loss of Rs 2,577 crore in September quarter, against a net loss of Rs 96 crore in the same period a year ago. In September 2019, Care Ratings had downgraded Reliance Capital’s Rs 17,000-crore debt to default grade ‘D’. The agency attributed its action to the company delaying by a day its payment on several non-convertible debentures (NCDs) it had issued.
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