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The outstanding loans of TajGVK Hotels & Resorts Ltd have been placed on watch with developing implications by rating agency ICRA. With the company considering raising funds, the performance of the company in the near and medium terms will have a bearing on further borrowings.
As on March 31, 2021, TajGVK’s gross debt excluding lease liabilities stood at ₹180.9 crore. TajGVK has undrawn working capital lines of ₹28 crore as on August 2, 2021 and is eligible for ECLGS 3.0 term loan of ₹33.3 crore. TajGVK has negligible cash balances as on date.
Also read: TajGVK Hotels Q1 loss at ₹9 cr; to raise ₹250 cr, mulls asset sale
The Board of Directors of TajGVK, on August 6, 2021, had approved a proposal to raise up to ₹250 crore, through debt, QIP, preferential issue or monetization of assets, subject to necessary regulatory and shareholder approvals. However, clarity on the timeline of fund infusion and end usage is awaited. Also, while the fund infusion could improve the company’s liquidity position, the extent of improvement and quantum of debt reduction remains to be seen. ICRA will continue to monitor the developments and take appropriate rating action, it informed. While the company witnessed sequential recovery in Q3 FY2021 and Q4 FY2021 after a weak H1 FY2021, the performance in Q1 FY2022 was again impacted by the second wave.
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