The company was planning to sell its stake both subsidiaries for Rs 330 crore as a part of the company’s debt resolution process.
According to banking sources, Religare Enterprises introduced a couple of investors for RFL to lenders in a meeting with bankers held recently.
“We are very satisfied with the way the entire debt restructuring exercise is moving and to this effect, the lenders meeting two weeks ago was meaningful and forward-looking. We even produced prospective investors to the lenders who are already doing detailed due diligence,” RFL CEO Pankaj Sharma said when contacted on the status of debt restructuring.
He, however, did not divulge details of the same in terms of the number of suitors identified and how many are doing due diligence.
Once the banks give nod to a suitor from the list of carefully chosen potential entities by REL, the regulatory approval process would be sought post that.
Sharma, who is associated with Religare Enterprises for many years and took charge as CEO of RFL in August, highlighted the reasons for the restructuring of the company which only in 2016 commanded a portfolio of Rs 16,000 crore before its ‘downhill journey’ in the same year before reaching its ‘nadir” in 2018.
“Siphoning off money by erstwhile promoters Singh brothers (Shivinder Mohan Singh and Malvinder Mohan Singh) resulted in a big hole in the company’s finances…it was in 2018 we reached our nadir…major equity holders came together and ousted Singh brothers and put in place new professional management and Board of Directors to save the company and protect stakeholders’ interests,” he told .
Even as the debt restructuring plan was progressing with the lenders, a simultaneous exercise for identifying potential partners was underway, he said hoping that the entire process will be completed by January-March quarter.
REL’s NBFC arm Religare Finvest Ltd (RFL) is at the centre of alleged misappropriation including fixed deposits with Lakshmi Vilas Bank.
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, including Enforcement Directorate and Economic Offences Wing of Delhi Police, are probing the case of financial bungling and have initiated legal process against them.
Post the financial irregularities amid massive leveraging, the Reserve Bank of India had initiated action and put the company under corrective action plan (CAP) of the Reserve Bank of India (RBI) since January 2018 due to its weak financial health, which bars undertaking of any fresh business.
Having paid Rs 6,500 crore to lenders since the change of management in 2018, Religare Finvest should complete debt restructuring by December to get out of Reserve Bank’s corrective action plan and start a new business from next financial year. The total outstanding debt stands at Rs 4,600 crore.