Bankers un­sure of ADAG’S debt re­pay­ment plans

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - DNA Money Cor­re­spon­dent cor­re­spon­[email protected]­

Mum­bai: With debt to banks and other fi­nan­cial en­ti­ties mount­ing, Re­liance ADAG chair­man Anil Ambani tried to quell fears of the in­vestors and the anx­i­ety of the lenders by say­ing that the group is fully com­mit­ted to meet the fu­ture debt obli­ga­tions.

How­ever, bankers are not con­vinced of the group’s re­pay­ing ca­pac­ity. “He made a sim­i­lar com­mit­ment on the re­pay­ments for Re­liance Com­mu­ni­ca­tions, which owes a debt of Rs 50,000 crore to a clutch of do­mes­tic banks. But no money came forth and he filed for bank­ruptcy in the Na­tional Com­pany Law Tri­bunal in May,” said a banker.

With shares pledged in many of the group com­pa­nies and with no ex­ter­nal liq­uid­ity, the com­pany will have to off­load stake in group com­pa­nies.

Ambani added that the group has al­ready re­paid debt of Rs 35,000 crore and will make timely pay­ments to pare the re­main­ing debt. How­ever, the com­pany de­clined to give a break-up of the debt pay­ment or to whom it was re­paid. When its en­ergy dis­tri­bu­tion com­pany Re­liance En­ergy was sold to Adani Group, the com­pany had re­paid about Rs 18,000 core of debt to banks and other in­sti­tu­tions.

A re­cent re­port by Risk Event-driven and Distressed In­tel­li­gence had stated that it found “some un­usual lend­ing ar­range­ments within the Re­liance Cap­i­tal Group” that em­ployed “box com­pa­nies” to al­low Ambani’s group firms to re­ceive funds from the fi­nancier, with­out trig­ger­ing reg­u­la­tory dis­clo­sures. The “alarm­ing” rise in such loans could snow­ball into another liq­uid­ity cri­sis in the strug­gling shadow bank­ing sec­tor, the re­port said.

“We are fully com­mit­ted to meet fu­ture debt ser­vic­ing obli­ga­tions in a timely man­ner through fur­ther as­set mon­eti­sa­tion plans,” Anil Ambani, Re­liance ADAG group chair­man, said in a sur­prise con­call called to quell the fears of in­vestors and fi­nan­cial in­sti­tu­tions. Turn to p2

Anil Ambani

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