Reliance Capital defaults!
Last updated: 03 Dec, 2020 | 12:03 pm
Reliance Capital has defaulted on its debt obligations.
What led to the default?
- Reliance Capital said that it is unable to proceed with asset monetization due to prohibition on the company by various courts.
- Reliance Capital had taken a loan of Rs 524 crore from HDFC and Rs 101 crore from Axis Bank. The total outstanding debt of the company stands at ₹20,077 crore till Oct 31.
- The company said it has defaulted on interest payment of ₹4.71 crore to HDFC and ₹71 lakh to Axis Bank due on October 31st 2020. The disclosure was made on November 27th 2020, Friday.
- Reliance Capital has been financially stressed for the last few years. Lenders of Reliance Capital Limited (RCL) have kick-started the process to sell its key assets to recover dues, according to media reports.
Reliance Capital’s net loss has widened to Rs 2,577 crore in the Jul-Sep 20 period, from a loss of Rs 96 crore in the same period previous fiscal. Reliance Capital said that there is material uncertainty about the company’s ability to continue as a going concern. Notably, the company’s entire debt outstanding of above ₹20,000 crore has been rated at CARE ‘D,’ (from September 2019).