Mumbai-based real estate financier Altico Capital, which recently defaulted on its interest payment, has blamed downgrade of its credit ratings and “unforeseen” action by some lenders for it's woes and has sought time to work out a resolution plan that will help meet it's financial commitments.
Altico Capital had earlier this month defaulted on its interest payments worth Rs 19.97 crore to Dubai's Mashreq Bank. The interest payment was on a principal of Rs 340 crore.
The non-banking financial services sector has faced a liquidity crisis ever since infrastructure lender IL&FS defaulted on its repayments last year. The liquidity woes have hit other NBFCs too, like DHFL, the second largest housing finance company.
Altico said on Sunday it was facing challenges similar to those faced by other NBFCs in the current environment, despite the significant efforts by its management.
“After Altico received a one-notch rating downgrade, earlier this month, several of its lenders recalled a substantial amount of debt. The company concluded 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,” it said.
Overall, Altico has a debt of more than Rs 4,000 crore.
On September 13, India Ratings and Research downgraded long-term issuer ratings on Altico to D from AA+, with a negative outlook. CARE Ratings also downgraded the company's long-term bank facilities to B with a negative outlook from AA- with a stable outlook.
“Following unforeseen action by some lenders, Altico notified the stock exchange on September 12, it had defaulted on an interest payment and stated it's commitment to evaluate options for resolving the liquidity issues,” said Altico.
Amid the crisis, the company's chief executive Sanjay Grewal resigned on September 18. Altico is now being led by its chief operating officer Sanjeev Agrawal.
The company has held series of meetings with its creditors with a view to agree a way forward to meet it's commitments.
“It is important that stakeholders give Altico and it's advisers 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 in India at the present time,” the company said.
Altico has appointed financial and legal advisers to support discussions with creditors.
