Talwalkars Group Firms Default On Interest Payments Worth Rs 3.44 Crore
Talwalkars Better Value Fitness Ltd. and Talwalkar Healthclubs Ltd. have defaulted on interest payments due July 31.
While Talwalkars Better Value Fitness Ltd. failed to pay interest of nearly Rs 94 lakh, Talwalkars Healthclubs defaulted by as much as Rs 2.5 crore, they informed the exchanges today.
Both the firms said that the Talwalkars Group—which runs gymnasiums, spas and centres for yoga, aerobics and health counseling—is in talks with bankers to restructure debt.
Talwalkars Better Value Fitness' interest default came on a loan of Rs 98.86 crore, which it had borrowed from Axis Bank Ltd., South Indian Bank Ltd. and Andhra Bank. The company has outstanding debt of Rs 203.86 crore, according to exchange filings.
CARE Ratings revised long-term facilities and non-convertible debentures of the company worth Rs 199.2 crore to ‘B' from A+. ICRA Ratings revised NCDs of the firm worth Rs 80 crore to ‘B-' from ‘BBB-', with a maintained negative outlook.
Talwalkars Healthclubs' interest default came on loan of Rs 279.99 crore, with Axis Bank, South Indian Bank, Hero Fincorp, Indian Bank and Andhra Bank being its lenders. Its outstanding debt is Rs 463.33 crore, according to exchange filings.
CARE Ratings revised the firm's long-term facilities and NCDs worth Rs 444.08 crore to ‘B' from ‘A+', to under credit watch with negative implications.
Rising Debt, Promoter Pledge
The group has net debt worth around Rs 719.4 crore against Rs 139 crore of cash and investments, according to its annual report for the year ended March 2019. A majority of its promoter stake is pledged.
The promoter stake pledged in Talwalkar Better Value and Talwalkar Healthclubs, according to exchange data, is 76.11 percent and 77.3 percent, respectively.
ICRA, in February, downgraded Talwalkars Better Value Fitness' NCDs worth Rs 80 crore to ‘A-'. It then said the negative outlook reflects the slow progress in asset monetisation plans. The company's statutory auditors, Lakdawala & Associates, resigned immediately citing lack of infrastructure for audit requirements.
Shares of Talwalkars Better Value Fitness and Talwalkars Healthclubs declined by 65 percent and 66 percent, respectively, over the past two weeks.
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