MUMBAI: Reliance Power on Tuesday informed the stock exchanges that it has defaulted on a debt of Rs 685 crore. The company said that the default pertained to the quarter ended December 2019.
On July 6, 2019, all the main lenders of Reliance Power had signed an inter-creditor agreement (ICA). Based on the ICA, lenders had agreed to a six-month standstill, during which they would not initiate recovery of their loans. The objective of the standstill agreement was to implement a resolution plan during the same period. Reliance Power’s default has coincided with the expiry of the 210-day deadline set by the RBI for resolving all stressed loans through an inter-creditor agreement allowed under the central bank’s June 6, 2019 circular. In terms of the circular, if banks failed to arrive at a resolution by January 7, they would have to either initiate insolvency proceedings or set aside as additional provisions, 20% of the stressed loan.
