The much-anticipated ₹4,000-crore debt restructuring plan (DRP) of Religare Finvest Limited, the NBFC arm of Religare Enterprises, has moved a step closer towards lenders’ final approval, with two credit rating agencies giving investment grade rating for it.

This has significantly bolstered the chances of DRP getting final approval from the sanctioning committee of the banks led by State Bank of India (SBI), said sources close to the development.

Rating mandatory

For banks to approve any debt restructuring plan, the rating from two rating agencies is mandatory, and both Crisil and CARE have given ‘investment grade’ ratings, it is learnt. Getting a rating is the most important milestone before the plan can be scrutinised by the sanctioning committee of the bank for final approval. SBI’s sanction is expected next week, followed by other banks in the next couple of weeks, they added.

“We are confident of getting RFL lender’s final approval on debt restructuring plan by September and, in fact, RFL is already preparing itself internally to resume lending from next quarter.

“Religare Enterprises also raised necessary funds in July for capital infusion in RFL as part of proposed DRP. Religare is well on course on its growth journey,” said Rashmi Saluja, Managing Director & Chairperson, Religare Finvest, and Executive Chairperson, Religare Enterprise.

On a turnaround path

REL, which is on a turnaround path under new management, had paid back the dues of RFL to the tune of about ₹6,800 crore in last three years after the latter shut down. The balance debt of ₹4,000 crore is now sought to be restructured.

Lenders are expected to realise upfront cash of ₹500 crore whenever the DRP gets implemented. The DRP will also lead to ₹2,000 crore of additional credit line getting sanctioned to RFL.

As part of the DRP, REL is to infuse ₹411-crore capital into equity of RFL and this capital has already been raised by REL. In July, REL raised ₹570 crore through preferential issue of shares to existing shareholders, including Burman family & Ares SSG Capital, and new marquee investors.

Recovery of FD

Meanwhile, sources said that RFL is also committed to the recovery of fixed deposits of ₹750 crore that was parked with Lakshmi Vilas Bank (now DBS Bank). RFL is confident the recovery will happen very soon, they added.

Religare Finvest had a 2018 pending suit against LVB, alleging misappropriation of its fixed deposits of ₹750 crore.