Religare Enterprises Limited (REL) on Wednesday said that lenders have in-principle agreed to consider the one-time settlement (OTS) proposal that could lead to the revival of its crisis-ridden wholly-owned subsidiary Religare Finvest Ltd. (RFL).

RFL, as of the end of March 2022, had an overdue of ₹5,344 crore. Religare Finvest had proposed a one-time settlement of ₹2,300 crore against its unpaid borrowings. It may be recalled that lenders had in February requested the Reserve Bank of India (RBI) to start insolvency proceedings against the company. Under the Insolvency and Bankruptcy Code (IBC), only the RBI can refer a finance company for insolvency proceedings.

REL on Wednesday said in a statement, which was also filed with the stock exchanges, that it had received a communication from its lead lender, informing it that the lenders had in-principle agreed to consider the One-Time Settlement proposal of RFL.

Commenting on this development, Rashmi Saluja, Executive Chairperson of REL, said, “The RFL OTS is a win-win solution for the lenders and RFL, especially for its revival and expansion. With the completion of OTS, all the legacy issues will be behind us and the Religare group will stride forward to focus on future growth and becoming a 360° financial services provider. ”

Since 2018, REL has been managed by a new management team and an independent board. In FY23, in addition to the growing existing subsidiaries, REL is looking to enter new strategic businesses including insurance broking, digital wealth management, asset reconstruction, and alternate investment funds, and is embarking on a new era of growth. 

RFL which has been a victim of siphoning off of funds by its erstwhile promoters, has initiated and is pursuing legal actions for recovery and now begun its path towards revival. Post RFL’s OTS completion, it is expected to have healthy prudential ratios well above those prescribed by RBI.

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