CARE Ratings (CARE) has downgraded Reliance Capital's entire outstanding debt to default "CARE D" rating, even though there were no overdues on principal or interest payment to any lender.
"This rating downgrade has initiated acceleration, of various facilities and consequential demands for immediate payment of amounts that were otherwise due and payable in a phased manner over the next 8 years till March 2028, as per the original terms of debt. It is expected that the debt servicing of the company in relation to the accelerated amounts and otherwise will be delayed," company said.
Further, the company is unable to proceed with asset monetization due to prohibition on the company to dispose off, alienate, encumber either directly or indirectly or otherwise part with the possession, of any assets except in the ordinary course of business such as payment of salary and statutory dues, pursuant to Order dated Nov. 20, 2019 passed by the Delhi High Court, and Orders dated Dec. 3, 2019 and Dec. 5, 2019 passed by the Debts Recovery Tribunal, Mumbai and Order dated Nov. 4, 2020 passed by the Bombay High Court, resulting in non-payment of the interest obligations due on Dec. 28, 2020 with respect to the NonConvertible Debentures (ISIN-INE013A08176).
Shares of the company declined Rs 0.43, or 3.42%, to trade at Rs 12.15. The total volume of shares traded was 208,971 at the BSE (11.33 a.m., Tuesday).