The delay in Jana Holdings Ltd.'s repayment of non-convertible debentures is not expected to have any impact on Jana Small Finance Bank, people familiar with the matter told NDTV Profit, citing the absence of any cross-default linkage between the holding company and the lender.
The people said Jana Holdings and Jana Small Finance Bank operate independently, with separate boards and no financial cross-default arrangements between their borrowings.
The clarification comes after India Ratings & Research downgraded Jana Holdings' non-convertible debentures to 'IND D', treating the extension of the securities' maturity as a distressed debt exchange after debenture holders agreed to defer repayment from June 30 to Dec. 31, 2026.
Repayment Rescheduled To Facilitate Stake Sale
The repayment was rescheduled through a consensual agreement with the debenture holders, who are private equity investors, to provide Jana Holdings additional time to sell its stake in Jana Small Finance Bank, the people said.
Jana Holdings currently owns a 16.95% stake in Jana Small Finance Bank, down from about 44% previously after steadily reducing its holding over the years, according to the people.
They added that Jana Holdings has not infused capital into the bank since June 2022.
Bank Operations Remain Ringfenced
There are no common directors between Jana Holdings and Jana Small Finance Bank, the people said. Jana Holdings has no representative on the bank's board, while the bank has no director on the holding company's board.
"There is no cross-default linkage between Jana Small Finance Bank's debt and Jana Holdings' debt," one of the people said.
The people added that the revised repayment schedule was agreed between Jana Holdings and the debenture holders and did not arise from any dispute between the parties.
India Ratings Treated Extension As Default
India Ratings said on Tuesday that Jana Holdings and its parent, Jana Capital Ltd., had been expected to repay the debentures through either a sale of their stake in Jana Small Finance Bank or refinancing. As the companies were unable to complete either before the original maturity date, debenture holders approved an extension of the repayment deadline to Dec. 31, 2026. The rating agency classified the change in terms as a distressed debt exchange and downgraded the securities to 'IND D'.
The agency also said Jana Holdings is a non-operating financial holding company whose debt servicing depends on monetising its stake in Jana Small Finance Bank or refinancing its obligations.
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