Reliance Capital slips 4% after non-payment for NCDs due on July 22

The company rued it is unable to proceed with asset monetization due to prohibition on the company through various orders.

Jul 23, 2021 10:07 IST India Infoline News Service

Reliance Capital Limited informed the exchanges about non-payment of the interest obligations and principal obligation due on July 22, 2021, with respect to the Non-Convertible Debentures (NCDs).

The company said that it is unable to proceed with asset monetization due to prohibition on the company to dispose of, 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, and March 15, 2021, passed by the Delhi High Court, and Orders dated December 3, 2019 and December 5, 2019 passed by the Debts Recovery Tribunal, Mumbai and Orders dated November 28, 2019, November 4, 2020, and March 5, 2021 passed by the Bombay High Court, resulting in non-payment of the interest obligations and principal obligation due on July 22, 2021 with respect to the NCDs.

“As already intimated in our communication dated September 21, 2019, in a completely biased, unwarranted and unjustified rating action on September 20, 2019, CARE Ratings (CARE) had downgraded the company’s entire outstanding debt to default “CARE D” rating, even though there were no overdues on principal or interest payment to any lender."

Further to the above, as communicated vide our letter dated October 11, 2019, that this rating downgrade has initiated 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. It is expected that the debt servicing of the company in relation to the accelerated amounts and otherwise will be delayed,” company said.

At around 10.13 am, Reliance Capital Ltd was trading at Rs18 per piece down by Rs0.75 or 4% from its previous closing of Rs18.75 per piece on the BSE.

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