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Altico defaults on interest payment, raises concern

India Ratings cut the creditworthiness of foreign private equity-backed Altico Capital to ‘IND A+’.

, ET Bureau|
Updated: Sep 13, 2019, 01.03 PM IST
On September 03, India Ratings cut the creditworthiness of Altico Capital India Limited’s to ‘IND A+’ from ‘IND AA-’ with negative outlook.
Foreign private equity-backed Altico Capital, an NBFC with more than Rs.4,000 crores of outstanding loans, has missed interest payments raising the spectre of another round of mark down of asset value by lenders and further restricting funding for the industry.

The non-banking finance company missed interest payment of Rs 19.97 crore on an overseas loans taken from Dubai-based Mashreq Bank, it said in a notification to BSE. The bank lent Rs 340 crore loan with six-year maturity. The latest default of interest payment raised the spectre of another mark down of asset value by lenders stoking investor fear.

“Our failure to repay the amounts set out above may result in an acceleration of interest repayment / redemption obligations in respect of non-convertible debt securities issued by us,” the company said in the stock exchange notification.

While a group of public sector and private sector banks have lent to the troubled financier, high networth individuals like Sachin Bansal – Flipkart co-founder – is said to have subscribed its bonds. Altico Captial borrowed Rs 4361.55 crore from banks and financial institutions. Bansal could not be contacted immediately.

“It may trigger a default in their timely repayments. We are evaluating options for resolving the liquidity crisis and will be engaging in discussions with various stakeholders for the same,” it said.

Altico seeks credit opportunities in the real estate sector, which has been facing rough weather. Clearwater Capital Partners, Varde Partners and Abu Dhabi Investment Council are three investors into this NBFC.

On September 03, India Ratings cut the creditworthiness of Altico Capital India Limited’s to ‘IND A+’ from ‘IND AA-’ with negative outlook.

At the end of June 2019, the liquidity reserve was sufficient to meet only four and a half months of obligations,” the rating company said.

“Given the tight liquidity scenario, the probability of getting prepayments as envisaged would be low, which could exert further strain on the liquidity.”

Earlier, the company’s chairperson Naina Lal Kidwai, former head of HSBC India too stepped down from Altico citing personal reason. A few months ago, auditing firm PwC resigned from Altico too.

Its chief executive officer Sanjay Greywal did not respond to ET’s phone calls.
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