Lenders said to have approved Hinduja offer for Reliance Capital, could recover over Rs 10k-cr

A Hinduja Group company’s proposal to acquire Reliance Capital out of bankruptcy has received overwhelming approval from lenders, people aware of the development said.

Lenders could recover more than ₹10,000 crore, or about 40% of verified claims, under the proposal from IndusInd International Holdings Ltd (IIHL). As much as 99.6% of the lenders favoured the plan as the voting ended Thursday, they said.

IIHL has offered to pay ₹9,660 crore to take over the financial services company once owned by Anil Ambani. Reliance Capital also has a cash balance of more than ₹400 crore, which will be distributed to the lenders, taking their total recovery to more than ₹10,000 crore. The exact cash available with the company is yet to be determined.

The administrator of Reliance Capital, Nageswara Rao Y, had invited verified lenders to start voting from June 9 on the IIHL plan – the sole offer that the lenders received. Torrent Investments, Piramal Capital and Oaktree Capital, which were the other bidders in the fray, did not submit detailed plans within the stipulated deadline.

Lenders Said to Have Approved Hinduja Offer for RCap, Could Recover Over ₹10k Cr

To conclude the sale, the offer has to get the approval of the bankruptcy court, the Reserve Bank of India and the Supreme Court.

The administrator is expected to file the resolution plan with the bankruptcy court, National Company Law Tribunal (NCLT), next week, ahead of the July 15 deadline.

He did not respond to ET’s request for comment.

The administrator has admitted ₹25,345 crore of claims from lenders as on June 8, 2023. The recovery on the claim amount will be around 40%. However, on the principal debt, it could be around 65%.

Under the bankruptcy law, to conclude the deal, the Hinduja Group will need clearance from the RBI as a “fit and proper” candidate to acquire a financial services company.

The deal would also require the top court’s approval since Torrent Investments, one of the initial bidders for Reliance Capital, has filed a suit over extension of the first round of auction beyond the original deadline.

In the auction on December 21, Torrent Investments had made the highest offer of ₹8,640 crore, while the Hinduja Group entity offered ₹8,110 crore.

However, within 24 hours, the Hinduja entity made a revised, improved offer of ₹9,000 crore, a development contested by Torrent. Another auction was held on April 26 wherein IIHL offered ₹9,640 crore. Torrent did not participate.

The apex court is scheduled to hear the case in August.


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