Anil Ambani's Reliance Capital to undergo asset sale; lenders appoint SBI CAPS, JM Financial to sell stakes

Lenders to once-a-billionaire Anil Ambani's Reliance Capital Limited (RCL) which recently defaulted on its debt repayments to debenture holders have reportedly appointed investment management firms to sell assets of the company. The creditors have appointed SBI CAPS and JM Financial to monetise the assets.

The key assets of RCL include Reliance Securities, Reliance Health and Reliance General Insurance Company. Other assets include Reliance Nippon Life Insurance, which is a 51:49 joint venture with Nippon Life, and Reliance Capital's 49 per cent stake in Reliance Asset Reconstruction Company.

Ninety nine per cent of the debenture holders of the firm account for 99 per cent of the borrowings of Reliance Capital. They have also constituted a committee of debenture holders for debt resolution. Employees' Provident Fund Organisation (EPFO) and Life Insurance Corporation (LIC) lead the committee. The exposure of EPFO is expected at nearly Rs 2,500 crore.

The company has a debt of Rs 19,806 crore including accrued interest. The exposure of debenture holders stands at nearly Rs 15,000 crore of the total debt.

Meanwhile, in July, the company had said it has defaulted in repayments to lenders and debenture holders and incurred losses during the June quarter, which indicates that material uncertainty exists that may cast a significant doubt on the company's ability to continue as a going concern.

"The company is in the process of meeting its obligations by way of time bound monetisation of its assets in cognisance with debenture trustee and debenture holders and accordingly the financial results of the company have been prepared on a going concern basis," the company had said earlier.

Also read: Anil Ambani: How the brother of India's richest man is on edge of bankruptcy