The bank on its part has agreed it will not prematurely encash the FD. Altico has also agreed that it will not use the FD with the bank to pay off any third party, or use it as security or lien.
In September, Altico defaulted on a repayment of Rs 20 crore to an external commercial borrowing facility from Mashreqbank PSC and subsequently the credit ratings of the realty lender were downgraded to default. Since the default, the NBFC has been engaging with banks on a resolution process.
Delay in fundraising due to challenging extraneous conditions, protracted processing by counterparties involved in monetisation initiatives, rating downgrade, multiple acceleration requests, lien-marking on FD resulted in an imminent liquidity shortfall situation for the realty financier led to the default.