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RHC Holding Pvt. Ltd, a company through which brothers Malvinder and Shivinder Singh own shares in Fortis Healthcare and Religare Group companies, has approached lenders for urgent funds to meet repayment obligations of financial services firm Religare Enterprises Ltd, two people directly aware of the talks said.

RHC Holding is seeking funds from companies, including private equity firms KKR & Co. and Piramal Enterprises, the people said, requesting anonymity.Shares of Religare Enterprises fell 20% on Tuesday on speculation that lenders may have invoked shares pledged with them by the promoters.

The Singh brothers, directly and through holding companies RHC Holding and RHC Finance, own 50.88% in Religare Enterprises. Exchange data showed that about 87.8% of this holding has been pledged with lenders. In intraday trading on Wednesday, Religare Enterprises fell as much as 10% to hit a record low of Rs92.20. However, the stock pared losses and closed 0.63% higher at Rs103.05. The stock has lost about 60% so far this year.

Responding to a query, an RHC Holding spokesperson said over email, “Would like to state that this information is speculative and incorrect. We would reiterate that no lenders have sold or are selling any shares pledged by the promoters.” Spokespersons for Piramal and KKR declined to comment.

The development comes close on the heels of a last-minute back-out by Singapore’s IHH Healthcare from acquiring a controlling stake in Fortis Healthcare and SRL Diagnostics. RHC Holding, it is understood, was banking on the stake sale to meet its debt obligations which stood over Rs4,000 crore as on March last year.

According to the people cited above, the company has repayments to the tune of Rs400 crore till February this year. For FY16, RHC Holding reported a profit of Rs40.91 crore on a total income of Rs642.81 crore as against a profit of Rs91.09 crore on a total income of Rs606.74 crore in the previous year. In the six months ended 30 September , the company had reported a profit of Rs16.64 crore on a total operating income of Rs349.26 crore derived from treasury income and mutual fund investments and from inter-corporate loans provided to group companies.

RHC Holding was in talks to refinance its $300 million debt. The discussions were put on the backburner once talks to sell a controlling stake in Fortis and SRL gained momentum with IHH Healthcare emerging as the frontrunner to buy these assets.

Earlier this year, Japanese drugmaker Daiichi Sankyo approached the Delhi high court challenging the stake sale, specifically in Fortis Healthcare, alleging that it would hamper recovery of damages of Rs2,562 crore awarded by a Singapore tribunal.

In June, Daiichi also moved the National Company Law Tribunal to block the demerger of SRL Diagnostics from Fortis Healthcare Ltd. The Delhi high court had in March directed the promoters to furnish details of all their unencumbered assets in order to ensure the use of such assets to satisfy the arbitral award at a later stage, if required.

Last modified on Thursday, 13 July 2017

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