Kinara Capital halts repayment till October after coordinated resolution with lenders

NBFC

Kinara Capital on August 8 said that they have halted repayments to October 2025 after the coordinated resolution with lenders.

“To facilitate a coordinated resolution, Kinara Capital has proposed to all of its lenders to come together under an inter-creditor agreement that would allow for a temporary Calm Period. The Company is committed to restarting repayments as early as October-2025,” company said in a statement.

The company further said that comprehensive resolution plan, outlining a path of full/near full recovery was shared by the company with all its lending partners; this plan was met with a positive response and it seemed that all the lenders were keen to work with the company to achieve it.

Kinara Capital is facing a liquidity crunch after some of its lenders appropriated fixed deposits and issued loan recall notices, prompting credit rating agency ICRA to downgrade the company’s ratings.

This lender appropriated unencumbered fixed deposits and cash from Kinara Capital’s accounts—funds that were free cash and critical for operational continuity. This unexpected move abruptly altered the company’s liquidity position, company said in a statement.

The statement further added that prompted by this action, other lenders also demanded immediate payments and issued full loan recall notices. This put Kinara Capital into a difficult situation. The Company’s Board of Directors (BoD) therefore took the decision to immediately preserve cash by pausing all the lender payments for a couple of months till the cashflows stabilize. This decision has led to payment defaults for now.