Religare Finvest Limited, subsidiary of Religare Enterprise Ltd proposed a debt resolution plan to banks after it failed to pay installment of principal amount of its loans in April, RFL said on Wednesday.

The Religare group company has been going through difficult times on account of mismanagement and misappropriation of funds orchestrated by the erstwhile promoters, RFL said in a release. However, given the inherent asset-liability mismatch, RFL has proposed a debt resolution plan (RP) to streamline its liability profile," it said, adding that the reference date for the RP is April 1, 2019.

RFL said it had adequate funds from its operations to meet the April installment. The RBI had put RFL under a corrective action plan in January 2018. RFL said despite the RBI action, it has made principal repayments and interest payments of over 4,400 crore till end of March 2019 and banks and financial institutions were kept current by that time.

The banks are in the process of seeking internal approval for the RP, it added. "As per the RP from the reference date, RFL is in a standstill arrangement and is required to service only interest. The principal installments will be restructured to align with asset maturity profile. In line with this RP, RFL did not pay the banks the principal installments falling due during April 2019," the non-banking financial company said.

Further, it said the rating agencies have considered non-payment of the April principal installment as a technical default and downgraded its rating to D (ICRA: from BB to D, Fitch: Long term loans - from B+ to D and Tier 2 - from B+ to C). As a part of RP, banks have separately appointed two rating agencies for rating the entire RP and the same would be applicable once the plan is implemented.

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