CHL's EXIM Bank settlement extension lapses as cases continue

CHL Limited’s extension for its USD 34 million one-time settlement with EXIM Bank expired on 30 September 2026 and had not been renewed when the auditor signed its report on 5 November 2026. The settlement concerns subsidiary CJSC CHL International’s loan, while proceedings remain pending before the Supreme Court of India and Debt Recovery Tribunal-III, Delhi.

What happened to CHL’s EXIM Bank settlement extension?

CHL’s latest extension for the one-time settlement, or OTS, expired on 30 September 2026. The consolidated limited-review report dated 5 November 2026 says CHL requested EXIM Bank for a further extension, but the bank had not granted it as of the report-signing date.

The filing describes the OTS as under implementation rather than completed. EXIM Bank, the principal borrower and the guarantors agreed to settle at USD 34 million; the auditor refers to an EXIM Bank approval letter dated 23 November 2023 and a 12 December 2023 judgment in Case No. 52/2023 of the Economic Court of Dushanbe that crystallised the liability against the borrowers and guarantors.

CHL’s financial-results note provides a further date in the settlement history. It says the OTS was executed during the pending cases and crystallised CJSC CHL International’s liability at USD 34 million through a letter dated 29 May 2026. Management said in that note that it expected the requested further extension in due course, but the auditor recorded no extension as at 5 November 2026.

Which borrower and guarantees are involved in the settlement?

CJSC CHL International is the principal borrower under a USD 32.50 million EXIM Bank term loan used to construct a five-star hotel in Dushanbe, Tajikistan. CHL gave the corporate guarantee, while the late Dr. Lalit Kumar Malhotra gave the personal guarantee, according to the note to the results for the half year ended 30 September 2026.

The USD 34 million settlement amount is USD 1.50 million above the original USD 32.50 million term-loan amount. The filing does not explain that difference, disclose instalments or payments under the OTS, or set out a replacement deadline after the extension expired on 30 September 2026.

The consolidated limited-review report identifies CJSC CHL International as CHL’s subsidiary. For the quarter ended 30 September 2026, the subsidiary reported total revenue of Rs 14.99 crore and loss after tax of Rs 2.07 crore; for the period from 1 April 2026 to 30 September 2026, it reported revenue of Rs 40.18 lakh and profit after tax of Rs 5.12 crore.

What EXIM Bank cases against CHL are still pending?

CHL has pending EXIM Bank proceedings in the Supreme Court of India and Debt Recovery Tribunal-III, Delhi, or DRT-III. Civil Appeal No. 1671 of 2019 challenges the National Company Law Appellate Tribunal, or NCLAT, judgment dated 16 January 2019, which upheld the National Company Law Tribunal, Delhi’s dismissal of EXIM Bank’s insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.

At DRT-III, EXIM Bank has claimed USD 44,611,207, plus pendente lite and future interest, against CHL as corporate guarantor and Dr. Lalit Kumar Malhotra as personal guarantor. CHL disclosed that the proceeding remained pending and that its next hearing was scheduled for 30 November 2026.

The stated DRT-III claim exceeds the USD 34 million OTS amount by USD 10,611,207 before the pendente lite and future interest cited in the filing. EXIM Bank also filed applications in Transfer Application No. 221 of 2022, EXIM Bank vs Dr. Lalit Kumar Malhotra, and Transfer Application No. 224 of 2022, EXIM Bank vs CHL Limited, to place on the DRT record that the settlement was under implementation.

How do CHL’s latest results compare with the settlement matter?

CHL reported consolidated profit after tax of Rs 11.85 crore for the half year ended 30 September 2026, compared with a loss after tax of Rs 12.86 crore for the half year ended 30 September 2025. Consolidated total income increased to Rs 92.09 crore from Rs 71.50 crore, while total expenses declined to Rs 77.86 crore from Rs 83.97 crore.

The consolidated half-year result included Rs 43.30 crore of foreign-currency translation fluctuation in other comprehensive income, or OCI. CHL said the item arose from translating the subsidiary’s financial statements from Tajikistani Somoni to Indian rupees and did not result in an actual gain or loss; it was recorded in OCI as a foreign-currency translation reserve rather than in profit or loss.

For the quarter ended 30 September 2026, consolidated profit after tax was Rs 1.71 crore, against a loss after tax of Rs 12.04 crore in the quarter ended 30 September 2025. Consolidated finance costs declined to Rs 4.87 crore from Rs 5.14 crore, but the reported quarterly and half-year results do not settle the separate USD 34 million OTS-extension issue.

What did CHL’s auditors conclude about the expired extension?

CHL’s auditors issued an unmodified limited-review conclusion while identifying the loan, settlement and litigation as an emphasis-of-matter item. D G A & Co said its review had not identified anything causing it to believe that the standalone or consolidated unaudited results for the quarter and half year ended 30 September 2026 contained a material misstatement under applicable reporting requirements.

The auditor specifically said its conclusion was not modified for the USD 34 million settlement, the expired extension or the pending proceedings. The emphasis-of-matter disclosure records both facts at once: the OTS was described as under implementation, while the requested further extension had not been granted by 5 November 2026.

D G A & Co also said it did not itself review the financial results of CJSC CHL International included in CHL’s consolidated statements. Its conclusion on the subsidiary’s reported Rs 14.99 crore quarterly revenue and Rs 2.07 crore quarterly loss after tax relied on the review report furnished by the subsidiary’s other auditor.

Conclusion

CHL’s filing shows that its settlement route with EXIM Bank remains unresolved. The USD 34 million OTS was under implementation, but its latest extension expired on 30 September 2026 without a further extension being granted by 5 November 2026, while the Supreme Court appeal and the DRT-III proceeding continued.

The next disclosed event is the DRT-III hearing on 30 November 2026. Investors will also watch for EXIM Bank’s response to CHL’s extension request, any disclosed OTS payment terms, and progress in Civil Appeal No. 1671 of 2019, for which the filing gives no resolution date.