RFL on track to restart its biz; most lenders approve Rs 2,300 cr OTS plan

New Delhi: Debt-ridden Religare Finvest Ltd (RFL) is hopeful of restarting its business operation in the New Year following the company's proposal of Rs 2,300 crore One Time Settlement (OTS) finding favour from most of the lenders.

Once the OTS process is completed, RFL will come out of the Corrective Action Plan (CAP) imposed by the Reserve Bank of India in January 2018 due to its weak financial health. According to sources, 14 out of 16 lenders have signed the OTS agreement and the remaining two are expected to sign in a day or two, sources said.

Query to RFL did not elicit any response in this regard. RFL, an NBFC arm of Religare Enterprises Ltd, owed about Rs 5,300 crore to the consortium of lenders led by State Bank of India (SBI). As part of the proposed OTS, the company in June 2022 deposited Rs 220 crore earnest money with the lead lender demonstrating its commitment towards RFL revival.

The company and its promoter are ready to make payment during this month itself even though they have time till 90 days as per the OTS agreement for the settlement, source said, adding, they have money almost ready for payment. Sources said, due to improved collection and recovery, RFL has also garnered money and the shortfall for OTS may be bridged by its parent.

The first debt restructuring (DR) plan was rejected by the Reserve Bank of India (RBI) in March 2020 as the suitor--TCG Advisory Pvt Ltd, a part of The Chatterjee Group--for RFL was not found to be 'fit and proper' by the regulator. The revised DR plan also could not go through, giving way to OTS.

RFL has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh. Multiple investigative agencies are probing the case of financial bungling of about Rs 4,000 crore. RFL filed First Information Report against the Singh brothers alleging financial irregularities in 2020. —PTI