The Economic Times daily newspaper is available online now.

    Bankers reject Religare's debt rejig proposal

    Synopsis

    The plan proposed by Religare Finvest management needed an infusion of Rs 700 crore of fresh loans from lenders over a period of two and a half years. Bankers are reluctant because the account is classified as a non performing asset (NPA).

    Untitled-7Agencies
    Bankers have rejected a proposed restructuring plan by the troubled Religare Finvest because of the high loan component in the plan, instead asking the company to seek the central bank's approval before lenders give their consent.

    The plan proposed by Religare Finvest management needed an infusion of Rs 700 crore of fresh loans from lenders over a period of two and a half years. Bankers are reluctant because the account is classified as a non performing asset (NPA).

    "The plan is not workable and almost all banks have rejected it. As far as banks are concerned, there is nothing on the table as of now and the company will have to come back to us with another plan," said a person familiar with the talks. "The Rs 700-crore required to be infused into the company as per the proposal is difficult to come by because banks are not comfortable putting in more money to a loan classified as NPA."

    The plan also envisaged infusion of Rs 300 crore from internal accruals.

    Moreover, the present management of the company has failed to receive Reserve Bank of India's (RBI) approval recognising it as a change in management. This means banks will not get benefits in provisions from restructuring this loan.



    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in