Rolta India bondholders band form group to negotiate restructuring after default

Rolta India

17/06/2016 07:26

HONG KONG, June 17 (Reuters) - Bondholders are forming a 
group to negotiate a debt restructuring at Rolta India 
 ROLT.NS , after the software services provider failed to make 
interest payments, according to a document seen by Reuters on 
Friday. 
    Rolta, whose biggest customer is the Indian government, 
failed to make a coupon payment on its $126 million bonds due 
2018  775793AA0=  that was scheduled to be made last month and 
whose grace period expired this week. It had earlier failed to 
make payments on a $35 million loan.  
    It is now scheduled to pay coupon on its $300 million 2019 
notes  775788AA0=  on July 24. 
    Over 25 percent of the holders of the two bonds have agreed 
to join the group being organised by Investment bank Houlihan 
Lokey  HLI.N  and law firm Ropes & Gray, according to one source 
familiar with the formation of the group. 
    Fitch said that delays in payments by the Indian government, 
along with banks' reluctance to lend had triggered a severe 
liquidity crunch at Rolta. 
    The agency estimated that over 45 percent of Rolta's 2015 
revenue of $560 million was related to the Indian government, 
mainly for defence services. 
    It said that Rolta's receivables as at end-March 2016 had 
increased substantially to $288 million, or about 190 days of 
its revenue, from 126 days a year earlier. 
    Banks' reluctance to lend to Rolta comes at a time when 
India is taking measures to clean up a banking system weighed 
down by $121 billion of bad debt. 
    Fitch cut Rolta's rating to RD or restricted default, from 
CC, and S&P Global lowered its rating to SD, or selective 
default, from CCC-minus, due to missed interest payments. urn:newsml:reuters.com:*:nFit961027 
 urn:newsml:reuters.com:*:nEMN55AOK8 
    Restricted default indicates there has been a failed payment 
but the company is yet to file for bankruptcy. A selective 
default indicates default on a specific issue or class of 
obligations but the borrower is expected to continue meeting its 
other payment obligations in a timely manner.  
    Rolta did not immediately respond to a request for comment. 
 
 (Reporting by Umesh Desai; Editing by Simon Cameron-Moore) 
 ((umesh.desai@thomsonreuters.com; +852-2843-6935; Reuters 
Messaging: umesh.desai.thomsonreuters.com@reuters.net)) 
 
Keywords: ROLTA BONDHOLDERS/RESTRUCTURING