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.
FinTech BizNews Service
Mumbai, August 7, 2025: Kinara Capital continued to meet all its debt obligations in full and on-time through July-2025. A comprehensive resolution plan, outlining a path of full/near full recovery was shared by Kinara Capital 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. However, despite this collaborative progress, one lender took unilateral action that was not aligned with the collective understanding among all lenders. 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. Kinara Capital claimed today through a statement.
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, added the company's statement.
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 and remains focused on restoring stability through a collaborative and a structured approach, claims the company.
As of the end of FY25, despite significant challenges over the past year, Kinara Capital had not defaulted on any lender payments and had maintained a positive ALM (Asset Liability Management) with sufficient liquidity to support ongoing operations.
