Altico Capital, which is reeling under a liquidity crisis and a weak real estate market, on Sunday said it has held a series of meetings with its creditors to find a resolution that will allow it to meet its financial commitments.
The liquidity situation of the non-banking finance company was exacerbated by, among others, prepayments of loans to a couple of lenders due to high interest rate reset/ exercise of put option, setting off of unutilised external commercial borrowing funds by a leading private sector bank against its outstanding, and loan-recall notices.
The total exposure of 27 lenders to Altico Capital is about ₹4,400 crore. The NBFC has a loan book of about ₹6,900 crore. Altico, in a statement, said that after it received a one-notch rating downgrade earlier this month, several of its lenders recalled a substantial amount of debt. The company concluded that it did not have sufficient liquidity to honour all of its obligations on a timely basis.
“This lack of capacity led Altico to pause further debt repayments in order to maintain itself as a going concern and to protect the interests of all stakeholders.
“Following unforeseen actions by some lenders, Altico notified the stock exchange that on September 12 it had defaulted on an interest payment and stated its commitment to evaluate options for resolving the liquidity issues,” said the statement.
The company emphasised that it is important that stakeholders give it and its advisors time to craft a plan that may maximise asset value, refrain from actions that exacerbate the liquidity problem, and bear in mind the significant headwinds the real estate sector faces at the present time.