India: Reliance Commercial Finance lenders seek suitors for debt resolution

The Reliance Industries Ltd. logo is displayed atop the company's gas station in Mumbai, India, on Thursday, July 19, 2012. Photographer: Dhiraj Singh/

Lenders to Reliance Commercial Finance Ltd (RCFL) have invited resolution plans from potential bidders under Reserve Bank of India’s 7 June circular on stressed assets, a public notice showed on Tuesday.

“A consortium of lenders led by Bank of Baroda are desirous of seeking resolution plans from eligible bidders having the adequate technical and financial capability, in respect of the company,” the notice said.

RCFL has been re-branded as Reliance Money, according to its website. The company is a 100% subsidiary of Reliance Capital Ltd, and offers a wide range of financial products including small and medium enterprise loans, loans against property, infra financing, agriculture loans and supply chain financing, it said.

Email queries to RCFL and Bank of Baroda did not elicit any answer.

On 7 May, RCFL’s independent auditors said it is engaged with all its lenders for debt resolution. Its total borrowings, including debt securities, stood at 9,812.9 crore as on 31 March 2020, down from 10,284.08 crore in the year-ago period.

“The company’s ability to meet its obligations is significantly dependent on material uncertain events, including restructuring of loans and achievement of debt resolution under inter-creditor agreement (ICA) framework that may cast doubt on its ability to continue as a going concern,” the auditors said.

Under ICA, lenders jointly appoint a lead bank, which functions on behalf of the entire group, and crafts a resolution plan to be approved by two-third of its members.

It reported a standalone net loss of 852 crore on a total income of 332 crore in six months to 31 March. Its finance costs stood at 591 crore during the same period.

“The resolution process is being initiated by lenders of RCFL who are signatories to the inter-creditor agreement dated 6 July 2019 and are governed by RBI circular. The lenders comprise approximately 91% of the total outstanding debt of RCFL as on 6 July 2019. The remaining lenders to RCFL comprise mutual funds, pension funds and others, and consent of such lenders may also be required in relation to the implementation of approved resolution plans, depending on the terms of their underlying contracts,” the notice said.

The article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.