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TNN
Mumbai: The Hinduja Group, through IndusInd International Holdings, is likely to become the new owner of Reliance Capital (RCap) as a majority of financial creditors have voted in its favour. IndusInd International Holdings has submitted a bid of approximately Rs 10,000 crore, and lenders will also receive the cash balances in RCap’s books. Although this bid is lower than the creditors’ estimated liquidation value, it is the highest offer from any bidder.
The major assets of RCap are its ownership of Reliance General Insurance and a partial shareholding in Reliance Nippon Life Insurance. However, selling these insurance arms separately may face legal complications.
Notably, the Hinduja Group, which has promoted IndusInd Bank, does not have an insurance company within its fold.
The primary creditors of RCap include Life Insurance Corporation, Employees Provident Fund Organisation, and JC Flowers Asset Reconstruction Company, which acquired Yes Bank’s bad loans. According to RCap’s website, the total admitted claims as of June 2023 amount to Rs 25,345 crore. However, banking sources indicate that the principal amount is only Rs 16,000 crore, with admitted claims including interest & penalties.
Over 99% of the creditors have voted in favour of the resolution plan. Typically, dissenting creditors would receive the liquidation value of their share. However, Since the bid amount is lower than the liquidation value, lenders have decided to make payments to all lenders proportionate to their admitted claims, based on the final ‘Plan Value’, regardless of their assent.
The deadline to submit the resolution plan to the National Company Law Tribunal (NCLT) is July 15, and the committee of creditors (CoC) is confident about meeting this deadline. The completion of the transaction is contingent upon a Supreme Court decision regarding a petition filed by Torrent, which argues that a second round of auction conducted by lenders after the conclusion of the first round is illegal.
Mumbai: The Hinduja Group, through IndusInd International Holdings, is likely to become the new owner of Reliance Capital (RCap) as a majority of financial creditors have voted in its favour. IndusInd International Holdings has submitted a bid of approximately Rs 10,000 crore, and lenders will also receive the cash balances in RCap’s books. Although this bid is lower than the creditors’ estimated liquidation value, it is the highest offer from any bidder.
The major assets of RCap are its ownership of Reliance General Insurance and a partial shareholding in Reliance Nippon Life Insurance. However, selling these insurance arms separately may face legal complications.
Notably, the Hinduja Group, which has promoted IndusInd Bank, does not have an insurance company within its fold.
The primary creditors of RCap include Life Insurance Corporation, Employees Provident Fund Organisation, and JC Flowers Asset Reconstruction Company, which acquired Yes Bank’s bad loans. According to RCap’s website, the total admitted claims as of June 2023 amount to Rs 25,345 crore. However, banking sources indicate that the principal amount is only Rs 16,000 crore, with admitted claims including interest & penalties.
Over 99% of the creditors have voted in favour of the resolution plan. Typically, dissenting creditors would receive the liquidation value of their share. However, Since the bid amount is lower than the liquidation value, lenders have decided to make payments to all lenders proportionate to their admitted claims, based on the final ‘Plan Value’, regardless of their assent.
The deadline to submit the resolution plan to the National Company Law Tribunal (NCLT) is July 15, and the committee of creditors (CoC) is confident about meeting this deadline. The completion of the transaction is contingent upon a Supreme Court decision regarding a petition filed by Torrent, which argues that a second round of auction conducted by lenders after the conclusion of the first round is illegal.
#Hindujas #IndusInd #RCaps #owner
