UPDATE 1-Troubled Finablr reports nearly $1 billion more in debt

(Adds details on debt, background and relation with NMC)

April 30 (Reuters) - Struggling payments group Finablr said on Thursday it might have nearly $1 billion more in debt than what it reported previously after a review with its creditors and independent investigators.

The Travelex owner had reported net debt of $334.1 million as of June 30.

“The board cannot exclude the possibility that some of the proceeds of these borrowings may have been used for purposes outside of the Finablr Group,” the company said in a statement.

The company’s warning comes a day after founder BR Shetty said a probe conducted by his own advisers had found alleged fraud at Finablr and that he was working to clear his name.

Finablr’s problems started to surface after U.S. shortseller Muddy Waters took aim at NMC Health, which was also founded by Shetty.

Finablr warned last month that it was preparing for potential insolvency, while operations of its unit in the UAE were seized by the country’s central bank.

The company, which added that it was currently verifying the debt level, said it and independent financial adviser Houlihan Lokey were engaging with creditors to explore options that were available to the group and its lenders. (Reporting by Yadarisa Shabong in Bengaluru; Editing by Ramakrishnan M. and Anil D’Silva)