Faced with severe pressure on revenues, TajGVK Hotels & Resorts Ltd, a joint venture of Tata group’s Indian Hotels and GVK group, is approaching lenders for a moratorium on loan repayments under RBI’s Covid-19-Regulatory Package.
TajGVK did not honour payment obligations falling due in March 2020, pertaining to a Rs 94.75 crore term loan, according to rating agency ICRA.
The rating agency affirmed “A+” rating for long term loans and “A1+” for short term loans. However, it revised the outlook on rating from “stable” to “Negative”.
ICRA said it has not treated the missed payment as a default for now, despite absence of a formal approval from the lenders allowing for payment relief. This is based on expectations that a formal approval for rescheduling the loan would be received soon, as permitted by the RBI. Non-recognition of default in this case is also in line with the guidance provided by Securities and Exchange Board of India (SEBI).
If the lenders do not approve of the moratorium in due course, it would review the above stance on default recognition, ICRA added.
All the six properties of the company remain shut due to the lockdown announced by government to contain the spread of the Covid-19 pandemic. The duration and scope of the lockdown is still uncertain. Its impact on the economy and discretionary spends in the coming months will have a significant impact on the company’s performance.
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