(Bloomberg) -- Beleaguered Altico Capital India Ltd. said a prolonged cash squeeze for India’s shadow lenders and property developers after the collapse of IL&FS Group last year led to its default.

Substantial strain in the short-term financing markets following a default by IL&FS caused a knock-on impact on other non-banking finance companies and the real-estate sector, Altico Capital said in a statement on Sunday. The financier is “facing challenges many similar businesses face in this environment,” it said.

Altico Capital, a non-banking finance company that focuses on lending to the real-estate sector, said earlier this month that it didn’t pay 199.7 million rupees ($2.8 million) of interest on borrowings from Dubai-based Mashreqbank PSC.Altico’s default worsens liquidity woes for the country’s shadow lenders, prolonging a cash crunch for the stressed sector. The squeeze has led to a series of rating downgrades for property financiers, including Indiabulls Housing Finance Ltd. and Reliance Home Finance Ltd.

Mumbai-based Altico plans to ask lenders for time to map out a plan to repay debt, the company said. The company has just 2 billion rupees of cash on its books and has about 14 billion rupees of debt due by Oct. 12.

READ: Beleaguered Altico Capital to seek more time to repay $610 million

Clearwater Capital Partners, Varde Partners and Abu Dhabi Investment Council are the top investors in the company.

To contact the reporter on this story: Rahul Satija in Mumbai at rsatija1@bloomberg.net

To contact the editors responsible for this story: Shamim Adam at sadam2@bloomberg.net, Stanley James

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