Reliance Capital administrator submits Hinduja Group’s IndusInd bid to NCLT for approval

Reliance Capital Limited has submitted an application for the resolution plan of Indusind International Holdings Ltd (IIHL), the investment arm of the Hinduja Group, as approved by the Committee of Creditors of Reliance Capital Limited (RCap) with the National Company Law Tribunal (NCLT).

It was reported in June that Reliance Capital's Committee of Creditors (CoC) has given its approval to the resolution plan proposed by Indusind International Holdings Ltd (IIHL) bringing closure to the long-drawn insolvency resolution process of the company.

IIHL was the sole bidder for Reliance Capital in the last round of auction held for the company on April 26 IIHL reportedly received an overwhelming majority of votes from the lenders, with 99.6 per cent in favor of its resolution plan for Reliance Capital.

The other bidders in the race were Torrent Investments and Oaktree Capital. But Torrent Investments and Oaktree Capital didn't submit bids, nor did the Piramal-Cosmea consortium.

In an exchange filing, the company said: “With reference to the provisions of Regulation 30 (2) (Schedule III Part A) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“SEBI ListingRegulations”), this is to inform you that the Administrator of Reliance Capital Limited has filed an application under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 (“Code”) for submission of resolution plan of IndusInd International Holdings Limited (“IIHL”), as approved by the Committee of Creditors of Reliance Capital Limited, with the Adjudicating Authority i.e. Hon'ble National Company Law Tribunal, Mumbai Bench.”

As per the resolution plan offered to Reliance Capital, IIHL has proposed to acquire the firm for a sum of Rs 9,661 crore in upfront cash, as part of the Insolvency and Bankruptcy Code (IBC) proceedings.

Besides, Reliance Capital has a cash balance of approximately Rs 350-400 crore, which will also be distributed among the lenders, as per reports. This comprehensive recovery plan is expected to result in a total recovery of around Rs 10,000 crore for the lenders, inclusive of the cash on the books of the company.

Meanwhile, the Hinduja family is looking to raise up to about Rs 8,200 crore to fund the potential acquisition deal of Reliance Capital.

Some of the funds that have been tapped are from Farallon Capital, Oaktree, Ares Asia and Cerberus, The Economic Times reported citing sources.

Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC. Kolkata-based Srei Group and Dewan Housing Finance Corporation (DHFL) were the other two.

The Reserve Bank of India (RBI) on November 29, 2021, superseded the board of Reliance Capital in view of payment defaults and serious governance issues.

In the first auction held in December, Torrent Investments made the highest offer of Rs 8,640 crore, followed by Hinduja Group at Rs 8,110 crore.

Within 24 hours, Hinduja offered a revised bid of Rs 9,000 crore, which Torrent then challenged before the NCLT.

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