The revised debt restructuring proposal for Religare Finvest Ltd (RFL) has entered the final stage with lead lender State Bank of India giving its preliminary nod for the rejig.
RFL, an NBFC arm of Religare Enterprises Ltd, has been barred from undertaking fresh business as it is under corrective action plan of the Reserve Bank of India since January 2018 due to its weak financial health.
"Yesterday, we got a favourable nod from SBI that they are going to be considering favourably the proposal with REL as an investor (for RFL debt recast)," Religare Enterprises Chairperson Rashmi Saluja told PTI on Friday.
Other formalities like capital infusion would be undertaken shortly, she said, adding, implementation should happen in two months.
State Bank of India (SBI), which is leading the consortium of 18 lenders, on Thursday conveyed that the debt restructuring proposal is under consideration on merit and the same will be considered if it is in compliance with RBI's June 7, 2019 circular subject to necessary internal approvals by consortium members.
To fund the debt recast of RFL, Religare Enterprises plans to raise capital shortly.
The decision with regard to capital raising will be taken by the board on June 8, she said, adding, quantum and other modalities would be decided in the board meeting.
The earlier debt restructuring plan was rejected by the Reserve Bank of India (RBI) in March 2020 as the suitor -- TCG Advisory Pvt Ltd, a part of the Chatterjee Group -- for RFL was not found to be 'fit and proper' by the regulator.
The company has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh. Multiple investigative agencies are probing the case of financial bungling of about Rs 4,000 crore.
The debt-ridden NBFC is actively pursuing recovery cases, including Lakshmi Vilas Bank (now DBS India). The court has given DBS India notice by making them a party.
RFL expects to recover its fixed deposits, with an interest of around Rs 950 crore from erstwhile Lakshmi Vilas Bank, whose officials allegedly misappropriated the FD amount in connivance with erstwhile Religare promoters Singh brothers.
Besides RFL, Care Health Insurance Ltd (CHIL) and Religare Broking are the other subsidiaries of Religare Enterprises. Debt-ridden RFL also has a subsidiary, Religare Housing Development Finance Corporation Ltd (RHDFCL).
(If you have a story in and around Mumbai, you have our ears, be a citizen journalist and send us your story here. )