Piramal Enterprises Ltd, a company controlled by Indian billionaire Ajay Piramal, has offered to repay a 15 billion rupee ($208 million) debt to Standard Chartered Plc early after getting a waiver on a covenant, according to people with knowledge of the matter.
The flagship company of the group — which runs non-bank financiers and a drug maker — hasn’t furnished additional security, as mandated, for the 9.5% notes maturing in January, the people said, asking not to be identified citing rules.
Piramal has offered to repay the debt using money raised from a preference issue to Canadian pension fund Caisse de Depot et Placement du Quebec, and from other sources, the people said.
It’s a very “routine treasury transaction,” Piramal Enterprises said in an email response. “Requests for waiver within timelines are part of normal and ordinary course of day-to-day treasury operations of any company (in any sector) and are not necessarily linked to the liquidity position of the firm.”
Many Indian shadow lenders are reeling from a prolonged upheaval in the nation’s credit markets, which has hurt cash flow and curtailed their ability to repay loans. Moody’s Investors Service, which this month cut its rating outlook for India, said it doesn’t expect the squeeze among financiers to be resolved soon, and warned the crunch could worsen.
Requests of such nature from clients “are common and received in normal course of business,” Rahul Virkar, a spokesman at Standard Chartered said in an email.