Reliance Commercial Finance lenders seek suitors to settle debt

Bombay : Reliance Commercial Finance Ltd (RCFL) lenders have invited potential bidders for resolution plans under the Reserve Bank of India’s June 7 circular on stressed assets, a public notice announced on Tuesday.

“A consortium of lenders led by Bank of Baroda wishes to seek resolution plans from eligible bidders with adequate technical and financial capability, as far as the company is concerned,” the notice reads.

RCFL has been renamed Reliance Money, according to its website. The company is a wholly owned subsidiary of Reliance Capital Ltd and offers a wide range of financial products including small and medium enterprise loans, real estate loans, infrastructure finance, agricultural loans and supply chain finance. supply, he said.

Email queries to RCFL and Bank of Baroda elicited no response.

On May 7, RCFL’s independent auditors said it was engaged with all of its lenders for the settlement of the debt. Its total borrowings, including debt securities, amount to 9,812.9 crores as of March 31, 2020, down from 10,284.08 crores in the prior year period.

“The Company’s ability to meet its obligations is significantly dependent on material uncertain events, including loan restructuring and debt resolution under the Intercreditor Agreement (ICA) which may cast doubt on its ability to continue operating,” the auditors said.

Under the ICA, the lenders jointly appoint a lead bank, which acts on behalf of the whole group, and draws up a resolution plan which must be approved by two-thirds of its members.

It reported a standalone net loss of 852 crore on total revenue of 332 crores in six months to March 31. His financial expenses amounted to 591 crores during the same period.

“The resolution process is being initiated by RCFL’s lenders who are signatories to the Intercreditor Agreement dated July 6, 2019 and are governed by the RBI Circular. Lenders represent approximately 91% of RCFL’s total outstanding debt as of July 6, 2019. Other lenders to RCFL include mutual funds, pension funds and others, and the consent of such lenders may also be required. regarding the implementation of the approved resolution. plans, depending on the terms of their underlying contracts,” the notice states.

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