New Delhi: Reliance Capital has said in a new regulatory filing that it has delayed servicing “interest/principal obligations” for a set of non-convertible debentures (NCDs).
The repayments were due on October 16 and 17.
In a statement put out on Thursday night, the Anil Ambani-owned firm has blamed a Care Ratings downgrade last month for its current debt repayment woes.
“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,” it said in a statement.
The non-banking finance company has argued that because of the downgrade, certain lenders have made demands for immediate repayment of debt that were “otherwise due and payable in a phased manner over the next 8 years till March 2028 as per the original terms of lending”.
“It is expected that the debt servicing of the Company in relation to the accelerated amounts and otherwise will be delayed,” the firm notes.
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In September 2019, the credit rating agency noted that Reliance Capital had delayed servicing several NCDs by one working day and thus had downgraded certain debt facilities to default.
At the time, the Anil Ambani-owned company had slammed the ratings agency, and noted that the one-day delay was due to a “technical glitch in bank servers”.
In a separate statement to the stock exchanges a few days ago, Reliance Capital had also noted that more delays may be in the offing:
“The Company had, by way of the communication dated September 21, 2019 informed the Stock Exchange and through them to public at large that this biased, unwarranted and unjustified action by CARE would precipitate a chain sequence of events that would eventually gravely harm the interests of large number of retail and institutional investors of the Company, having direct and indirect exposure to securities of the Company.
Inevitably, that cascading effect of the unwarranted and unjustified rating downgrade now stands precipitated, with acceleration, etc. of various facilities by certain lenders 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 lending
As a direct consequence of the chain reaction of events triggered by the unwarranted rating action of CARE, it is expected that the debt servicing of the Company in relation to the accelerated amounts and otherwise will be delayed.”