The first batch of Rafael jets landed in India on Wednesday, five years after the Indian government signed a contract with Anil Ambani. However, coincidentally, the debt-stricken business head of Reliance Group is all set to fall into a deeper trench.
Private lender Yes Bank has taken possession of Reliance Centre, the headquarters of the Anil Dhirubhai Ambani Group (ADAG) situated at Santacruz in Mumbai for default in repayment of dues worth Rs 2,892 crore, by Reliance infrastructure ltd.
The Bank issued possession notices on Anil Dhirubhai Ambani Group (ADAG) headquarters and two other offices. The securement of the building took place as on 22 July under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFESI). The bank published an advertisement that it has taken control of the ADAG headquarters building which is over 21,000 sq ft. It also took over two floors in Nagin Mahal in South Mumbai, the erstwhile headquarters of the group.
Yes Bank said it had sought to recover dues of Rs 2,892.44 crore from Reliance Infrastructure on May 6 and took possession of the three properties on July 22 after a failure to repay even after 60 days of the notice. It cautioned the general public not to deal with the properties, adding that any dealing with the properties will be subject to a charge of Yes Bank for an amount of Rs 2,892 crore.
Nearly all the major companies in Anil Dhirubhai Ambani Group (ADAG) were operating out of the Santacruz office called ‘Reliance Centre’. However, in the last few years, the fortunes of the group have gone south with the companies meeting various fates, including bankruptcies and stake sales.
Last year, the group was looking to lease out the same headquarters – which measures 21,432 square metres as per the Yes Bank notice -in an attempt to raise resources to pay off debts. The other two properties are spread over two different floors in South Mumbai’s Nagin Mahal, measuring 1,717 sq ft and 4,936 sq ft.
It can be noted that exposure to ADAG firms is blamed as among the key reasons for the high amount of bad debt piled up by Yes Bank. Due to the high amount of non-performing assets, the lender had to be bailed out by an SBI-led consortium of lenders for Rs 10,000 crore. Before the bail-out, the government and the RBI superseded the Yes Bank board in March and installed a new chief executive and board.
On June 23, Anil Ambani had claimed that Reliance Infrastructure, which has loans outstanding of Rs 6,000 crore, will be completely debt-free in 2020-21. In 2018, the company sold its Mumbai energy business to Adani Transmission for nearly Rs 18,800 crore, which helped reduce the debt to nearly Rs 7,500 crore.