Bankers un­sure of ADAG’S debt re­pay­ment

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE - From p1

He said “ru­mour mon­ger­ing, spec­u­la­tion, and bear ham­mer­ing” re­sulted in a steep fall in all the Re­liance Group com­pany shares over the past few weeks. Ambani said this had “caused grave dam­age” to all the stake­hold­ers.

Giv­ing a fur­ther break­down of pay­ment from April 1, 2018, to May 31, 2019, Ambani said Rs 25,000 crore had been paid to­wards prin­ci­pal lead­ing to over­all debt reduction and Rs 10,000 crore to­wards in­ter­est pay­ments. Ambani said the com­pany dis­closed that the debt ser­vic­ing pay­ments of Rs 35,000 crore had been made al­most en­tirely from as­set mon­eti­sa­tion de­spite a liq­uid­i­tys­tarved en­vi­ron­ment and op­er­a­tional cash flows in an op­er­at­ing en­vi­ron­ment be­set by pro­ce­dural and reg­u­la­tory hur­dles. He said this amount in­cluded debt ser­vic­ing pay­ments by Re­liance Cap­i­tal Group, Re­liance Power group, Re­liance In­fra group, and re­spec­tive af­fil­i­ates.

“Dur­ing the last 14 months, lenders from all cat­e­gories - whether banks, mu­tual funds, in­sur­ance com­pa­nies, prov­i­dent funds or NBFCS - had pro­vided zero net ad­di­tional liq­uid­ity or debt to any en­tity of the Re­liance Group,” Ambani said. He blamed reg­u­la­tory in­sti­tu­tions and courts for the de­lay in pass­ing ver­dicts, which had kept the group from re­ceiv­ing dues of over Rs 30,000 crore.

“To com­pound mat­ters, the reg­u­la­tory bod­ies and courts have not passed any fi­nal ad­ju­di­ca­tion or­ders on claims ag­gre­gat­ing to over Rs 30,000 crore that is due for more than 5-10 years to var­i­ous Group com­pa­nies, es­pe­cially Re­liance In­fra­struc­ture and Re­liance Power, and their af­fil­i­ates,” said Ambani.

Re­liance Group, he con­cluded, was com­mit­ted to trans­for­ma­tion and be­come cap­i­tal light with bare min­i­mal debt and a higher re­turn on eq­uity.

Shares of most Re­liance ADAG Group com­pa­nies closed higher on BSE after Ambani’s state­ment. Re­liance Cap­i­tal closed at Rs 93.90, up 2.96% higher over the pre­vi­ous close, while Re­liance In­fra­struc­ture was up 1.17% at Rs 64.95, and Re­liance Nip­pon Life As­set Man­age­ment Com­pany rose 1.60% to close at Rs 219.70 a share. How­ever, Re­liance Naval & En­gi­neer­ing ended 2.62% lower at Rs 6.33 a share.

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