Reliance Home Finance Defaults on Rs 707 Million Term Loan Repayment

Reliance Home Finance Ltd today said it has defaulted on repayment of term loans to the tune of 706.60 mln rupees, due on Mar 30.

This includes principal payment of 500 mln rupees and interest payment of 3.80 mln rupees owed to Bank of India, and 200 mln rupees of principal amount and 2.8 mln rupees of interest owed to erstwhile State Bank of Patiala--now State Bank of India. There have been delays in servicing debt due to restrictions on the company to sell its assets, as imposed by the Delhi High Court, and not because the company does not have the resources, it said in an exchange filing.

Reliance Home Finance has around 7 bln rupees in the form of units of liquid mutual funds, the notification said. The court order, passed in November, had said the company cannot "dispose off, alienate, encumber either directly or indirectly or otherwise part with the possession of any assets". Further, lenders to the company also signed an inter-creditor agreement to arrive at a debt resolution plan for the company. "The above has resulted in delay in debt servicing by the company," the company said in the notification.

The company had borrowed 1.50 bln rupees from Bank of India for five years at 9.15%, and 1 bln rupees from State Bank of Patiala at 17.00%, also for five years. Total outstanding borrowings of Reliance Home Finance from banks and financial institutions were at 39.85 bln rupees as at the end of March. Total financial indebtedness of the company, including short-term and long-term debt, was at 121.56 bln rupees.