Piramal Capital & Housing Finance has borrowed Rs 1,100 crore ($153 million) from UK's Barclays to service part of its existing debt and issue new loans, according to a Bloomberg report.
While the interest rate on the four-month loan to Primala Capital is 7.5 percent, the annualised cost on adding fees is higher than 10 percent, the publication quoted sources say.
The non-banking housing finance company has offered to repay the loan from the proceeds of a proposed share sale, the sources added.
Moneycontrol could not independently verify the story.
Barclays is the sole underwriter of the loan, and will keep it on its books until repayment, a source told the publication. The loan comes at a time when NBFCs are struggling to repay loans after troubles hit the sector in September 2018.
Piramal and Barclays declined to answer Bloomberg's queries.
Rating agencies ICRA and CARE Rating had earlier this year downgraded Piramal Capital’s non-convertible debentures (NCDs) to AA from AA+, citing funding challenges.
Piramal Enterprises has announced its intention to raise Rs 5,400 crore ($770 million). The parent company had in November 2019 proposed clearing Rs 15,000 crore of debt to Standard Charted after receiving a waiver on a covenant, the report added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!