Religare Finvest: lenders agree in principle to consider a single settlement
Religare Enterprises Limited (REL) said on Wednesday that lenders had agreed in principle to consider the Single Settlement (OTS) proposal which could lead to the relaunch of its crisis-stricken subsidiary Religare Finvest Ltd. (RFL).
RFL as of end of March 2022 was ₹5,344 crore behind. Religare Finvest had offered a one-time settlement of ₹2,300 crore against its unpaid loans. Recall that lenders had asked the Reserve Bank of India (RBI) in February to open insolvency proceedings against the company. Under the Insolvency and Bankruptcy Code (IBC), only the RBI can refer a financial company to insolvency proceedings.
REL said in a statement on Wednesday, which was also filed with the exchanges, that it had received communication from its lead lender advising that the lenders had agreed in principle to consider RFL’s single settlement proposal.
Commenting on the development, Rashmi Saluja, Executive Chairman of REL, said, “The RFL OTS is a win-win solution for lenders and RFL, especially for its relaunch and expansion. With the completion of OTS, all legacy issues will be behind us and Religare Group will take great strides to focus on its future growth and become a 360° financial services provider. ”
Since 2018, REL has been led by a new management team and an independent board of directors. In FY23, in addition to existing growing subsidiaries, REL seeks to enter new strategic businesses, including insurance brokerage, digital wealth management, asset reconstruction and investment funds alternatives, and embarks on a new era of growth.
RFL, which was the victim of embezzlement by its former promoters, has taken and is pursuing legal action for recovery and is now on its way to rebirth. After the completion of RFL’s OTS, sound prudential ratios are expected to be well above those prescribed by RBI.
June 01, 2022