Reliance Capital Q2 net loss widens multi-fold to Rs 2,577 crore

Reliance Capital on Friday reported multi-fold widening of its consolidated net loss to Rs 2,577 crore in the second quarter ended September of this fiscal.

The company had posted a net loss of Rs 96 crore in the quarter ended September a year ago.

The loss in the quarter under review was also higher as compared with Rs 1,095 crore loss in June quarter of this fiscal.

Total consolidated income fell to Rs 4,929 crore in July-September period of 2020-21 from Rs 5,064 crore in the year-ago quarter, Reliance Capital said in a regulatory filing.

Total expenses at Rs 7,183 crore exceeded its income during the quarter. The expenses stood at Rs 9,042 crore in the corresponding quarter of last year.

"The parent company has defaulted in repayment of obligation to the lenders and debenture holders and has incurred losses during the period, which indicate material uncertainty exists that may cast a significant doubt on the company's ability to continue as a going concern," Reliance Capital said.

Further, it said the company is in the process of meeting its obligations by way of time-bound monetisation of its assets in cognizance with debenture trustee (Vistra) and debenture holders.

The committee of debenture holders have sought expression of interest (EoI) for submission of asset monetisation plans for certain subsidiaries/investments of the company, it said.

The invitation for this EoI has been issued on October 31, 2020 and the financial results of the company have been prepared on a "going concern" basis, it added.

The company is engaged in finance and investment activities, life and general insurance, commercial finance, home finance and other financing business.

Reliance Capital said its home finance entity ceased to be its subsidiary with effect from March 5, 2020.

The listed secured non-convertible debentures of the parent company (Reliance Capital) aggregating to Rs 14,827 crore as of September 30, 2020 are secured by way of mortgage on the parent company's immovable property and on present and future book debts, business receivables, investment property among others and the "asset cover thereof exceeds 100 per cent of the principal amount of the said debentures", it added.

On Reliance Home Finance (RHFL), it said the company has engaged with all its lenders for a debt resolution plan.

With Bank of Baroda acting as the lead banker, it said an inter-creditor agreement has been entered for the resolution.

The consolidated results of Reliance Capital included financial statements from a total of 20 subsidiaries (including step-down subsidiaries) and as many as five associates, including Reliance Home Finance Ltd, as per the limited review report of the company's chartered accountants Pathak HD & Associates LLP.

On a standalone basis, Reliance Capital reported a net loss of Rs 2,475 crore during Q2FY21 as compared with Rs 2,820 crore loss in year-ago period.

Total revenue declined to Rs 274 crore as against Rs 316 crore a year ago.

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