Reliance Capital unable to make payments due on November 25 with respect to the NCDs

The company said that prohibition orders issued by various courts after rating downgrade by CARE last year is preventing it from making due payments.

Nov 27, 2020 08:11 IST India Infoline News Service

Reliance Capital Limited informed the exchanges Thursday that the company is unable to proceed with asset monetization due to prohibition on the company by various courts. The company said it resulted in non-payment of its debt servicing of the interest obligations due on November 25, 2020 with respect to the Non-Convertible Debentures (NCDs).

“The company is unable to proceed with asset monetization 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 Delhi High Court, and Orders dated December 3, 2019 and December 5, 2019 passed by the  Debts Recovery Tribunal, Mumbai and Order dated November 4, 2020 passed by the Bombay High Court, resulting in non-payment of its debt servicing of the interest obligations due on November 25, 2020 with respect to the Non-Convertible Debentures,” company said.

Reliance Capital had earlier communicated that 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.

The company had said, 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 eight years till March 2028, as per the original terms of debt.

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