Due to the issues emanating from siphoning and misappropriation of funds by erstwhile promoters and their associates, RFL has been put under corrective action plan by the RBI since January 18, 2018, it added.
The company has been in financial distress, primarily due to the alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh.
"Consequently, RFL is facing significant asset-liability mismatches. RFL, to revive its business and to ensure proper alignment of its asset-liability profile, is in the process of submitting the revised debt resolution plan to its lenders," the company noted.
In light of these facts, "it seems difficult for RFL to service/pay interest and principal amount of the aforementioned NCDs to the eligible debenture holder on the approaching maturity date i.e. April 30, 2021," the company said, attaching a copy of the announcement dated April 13, 2021, made by its subsidiary RFL.
Debenture holder (Axis Bank) and debenture trustee (Axis Trustee Service Ltd) were intimated about the likely default on Tuesday (April 13, 2021).
"As you are aware, the company had borrowed funds from Axis Bank through private placement of NCDs...we would like to inform you that the company is not in a position to service the interest and principal amount of these NCDs on the approaching maturity date April 30, 2021," RFL said in copies sent to Axis Bank and Axis Trustee Service.
Axis Bank is also a signatory to the company's inter-creditor agreement (ICA), signed in July 2019, among the lenders/bankers as per the debt resolution (DR) plan.
Axis Bank approved the debt resolution plan of RFL in February 2020.
"Further, along with all the lenders, we have informed you as well about the proposed revised DR plan with Religare Enterprises continuing (REL) as a promoter of RFL and also seek your full support for approval and implementation of the same," as per the copy sent to Axis Bank.
The bonds are listed on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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