Reliance Capital lenders are presented with 14 resolution ideas

  • Aug. 31, 2022, 1:30 p.m.

Lenders to Reliance Capital (RCap) received 14 resolution plans on Monday as part of the Anil Ambani-founded holding company's insolvency proceedings. A Piramal Group-led consortium, Oaktree Capital, Torrent Investments, IndusInd International, and Cosmea Financial Services are among bidders who have either offered to acquire the entire company or submitted plans for select clusters, said two people aware of the development. Advent International and Zurich Insurance have bid for a 100% stake in Reliance.

According to the people, NSE 1.55% General Insurance (RGI) is available. The Naveen Jindal group, through Jindal Power, bid for stakes in Reliance Asset Reconstruction Co. as well as Reliance Capital.Authum Investment has also bid for the company.

Since Reliance Capital The NSE-2.80% has about 20 financial services companies, including securities broking, insurance, and an asset reconstruction company (ARC) in its fold. Administrator Nageswar Rao Y had given potential applicants a choice to bid for the whole or for subsidiaries and real estate.

The administrators, Piramal, India, NSE 4.56 % and Torrent Investments, did not respond to ET's queries. Jindal Power, Oaktree, and Advent declined to comment. The administrator had invited binding bids by the end of August 29 (Monday midnight). Submissions were opened at the Sahara Star hotel in Mumbai on Tuesday, the people said. 

The Piramal consortium and Oaktree are said to be the front-runners, said one of the people cited above. 

90% of recoveries are likely to come from insurance companies. 
The Piramal-led consortium includes APAC Investment IV Ltd, APAC Investment VII Ltd, India Resurgence Fund and PEL Finhold Pvt. If the grouping emerges as the winning bidder, it will be the second acquisition of a financial services company by it under the Insolvency and Bankruptcy Code (IBC) after Dewan 

NSE 1.97% (DHFL) Housing Finance Ltd.Oaktree was in the fray for DHFL as well. Sam Ghosh, founder-promoter of Cosmea Financial Holdings, was heading Reliance Capital for almost nine years until 2017. 

The administrator received 54 expressions of interest (EoIs), including applications for Reliance Capital in its entirety and for individual units. About 90% of recoveries are estimated to come from life and general insurance companies. A banker's estimate said bids for the entire company could range from 7,000 crore to 8,000 crore.

The administrator has verified claims of 23,666 crore from financial creditors; the highest is from Yes Bank NSE came in second with 1.54%. LIC is seeking buyers for its 3,400 crore debt exposure to Reliance Capital and has invited binding bids by September 5 from ARCs, as reported by ET on August 22. 

Although lenders are proceeding with the sale of Reliance Capital, some investors fear that the process may be hindered if the share pledge of RGI is not released by the debenture trustee, as reported by ET on June 27. This is one reason bidders may make conditional offers, said the banker cited above.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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