Religare Finvest proposes a resolution plan for Rs 5,852 crore of debt

Religare Finvest has proposed a resolution plan for its Rs 5,852 crore of debt. The aim is to restructure the dues to enable the lenders to keep the account classified as a standard one. 

If approved, this would be the first such recast plan for a non-banking financial company under the RBI’s Prudential Framework for Resolution of Stressed Assets of June 2019, said Sanjay Palve, chief executive at Religare Finvest.

According to the plan, of the Rs 5,852 crore, around Rs 2,700 crore is sustainable debt and will be serviced by the SME portfolio. For the unsustainable debt (both components are secured), the firm would issue non-convertible debentures worth Rs 1,800-1,900 crore to the lenders of 5-10 year duration.

There would be a capital component — the lenders get equity capital of Rs 450 crore. They would also get bonds of Rs 740 crore with a 10-year duration, at a coupon of 0.01 per cent. The lenders referred the plan to the Indian Banks’ Association; the panel has sent its recommendations and the firm is getting the needed approvals, Palve said.

As part of the resolution plan, The Chatterjee Group will invest around Rs 500 crore as new equity capital and buy out Rs 300 crore worth of secondary purchases. The management is also seeking Rs 3,000 crore from the lenders for a revival, which they hope to restart early in FY21.