RInfra lenders sign inter-creditor agreement on resolution plan

Our Bureau Mumbai | Updated on July 11, 2019 Published on July 11, 2019

Anil Ambani (file photo)   -  REUTERS

The Anil Ambani-led Reliance Infrastructure Ltd’s 16 lenders have signed an inter-creditor agreement (ICA) in an effort to resolve its debt. An ICA provides the ground rules for the finalisation and implementation of a resolution plan (RP) for borrowers with credit facilities from more than one lender.

RInfra’s lenders have all signed up to resolve its debt, which is estimated at ₹5,900 crore. The development comes on the back of a June 7 RBI circular on “Prudential Framework for Resolution of Stressed Assets.” Under the framework, an RP has to be agreed to by 75 per cent of the lenders by value of debt and 60 per cent by number of lenders.

With the ICA, RInfra has achieved a 180-day standstill period. The purpose of the standstill period is to give the senior creditor an exclusive period of time during which it may assess its rights and, if it determines that it will enforce its rights against the collateral, to enforce such rights without interference from the junior creditors.

RInfra shares closed at ₹51, almost 11 per cent up from the previous day’s close on the back of the ICA news.

Monetising assets

The company will implement the RP well ahead of the 180-day deadline by monetising assets, a company spokesperson said.

As part of this, it has announced the sale of the Delhi-Agra toll road to Singapore-based Cube Highways and Infrastructure III. The deal will close by the end of August.

Further, RInfra plans to lease out its marquee headquarters — Reliance Centre — in suburban Mumbai, and utilise the entire proceeds to pare its debt.

The property, located at Santacruz (East), is a modern building with more than 6.95-lakh sq ft of office space on a 15,514-sq m plot.

Published on July 11, 2019
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