ACRE, an asset reconstruction company, bought a ₹524 crore term loan from housing finance company HDFC Ltd and a ₹100 crore term loan and ₹490 crore non-convertible debentures (NCD) from Axis Bank, the people said. One of the persons mentioned above stated that both the trades were done purely on cash basis.
As per the company’s annual report for the financial year March 31, 2021, HDFC and Axis Bank were the only two lenders who provided term loans to RCap.
NS Anil Dhirubhai Ambani The finance company promoted by the group has a total liability of ₹19,123 crore.
Axis Bank in October sold two 8.85% NCDs maturing in 2026 for ₹488.2 crore and one 9% NCD maturing in 2026 for ₹1.85 crore in the secondary bond market to Asset Care and Reconstruction in October.
default range
Trading with HDFC was concluded in June, said the people mentioned above. HDFC had outstanding debt of ₹524 crore and interest of ₹79 crore as on March 31, 2021.
HDFC, Axis Bank and ACRE did not respond to requests for comment. In September 2019, RCap’s loan facilities were downgraded by CARE Ratings indicating de-defaulting category, when it defaulted on payments on NCDs.
RCAP, which has been a defaulter for more than two years, superseded its board on Monday. In a statement, the RBI said that it has done so in view of “the default by Reliance Capital in meeting various payment obligations to its creditors, and serious governance concerns, which the Board has not been able to effectively address.” The company’s total liabilities include NCDs of ₹16,260 crore, term loans of ₹625 crore and inter-corporate deposits of ₹561 crore. It has also issued a corporate guarantee of ₹1,677 crore.
In June last year, ET reported that Deutsche Bank had bought Rs 565 crore of Reliance Capital at a discount of 70% in the secondary market through seven transactions.
The RBI will approach the National Company Law Tribunal between Friday and Monday to admit the finance company for the corporate insolvency resolution process, said one of the persons mentioned above. Y Nageswara Rao, former executive director of Bank of Maharashtra, has been appointed as the administrator of RCAP. Reliance Capital, promoted by ADAG, is registered with the RBI as a core investment company, with investments in general and life insurance, asset management, stock broking, housing finance, wealth management and asset reconstruction.