Bankers unsure of ADAG’S debt repayment plans
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