Astonishingly, lenders could potentially recover an impressive sum of over ₹10,000 crores, accounting for approximately 40% of verified claims, under the proposal presented by none other than IndusInd International Holdings Ltd (IIHL) of Hinduja Group. Closing on Thursday, the voting witnessed an astounding 99.6% of lenders favoring this plan, signaling their unwavering support.
In a rather bewildering turn of events, it has been disclosed by sources that a Hinduja Group company’s proposal to acquire Reliance Capital, which finds itself submerged in bankruptcy woes, has garnered an overwhelming approval from lenders.
Astonishingly, lenders could potentially recover an impressive sum of over ₹10,000 crore, accounting for approximately 40% of verified claims, under the proposal presented by none other than IndusInd International Holdings Ltd (IIHL). Closing on Thursday, the voting witnessed an astounding 99.6% of lenders favoring this plan, signaling their unwavering support.
IIHL, in its audacious bid, has put forth a staggering amount of ₹9,660 crore to seize control of this financially beleaguered institution that was once under the ownership of Anil Ambani.
Furthermore, it should be noted that Reliance Capital retains a cash balance surpassing ₹400 crore, which will be judiciously allocated to the lenders, thus enhancing their total recovery to an extraordinary figure exceeding ₹10,000 crore. The precise amount of cash available to the company, however, remains yet to be ascertained, shrouded in an aura of mystery.
The esteemed administrator of Reliance Capital, going by the name of Nageswara Rao Y, had indeed summoned verified lenders to initiate voting proceedings commencing on June 9, focusing solely on the proposal presented by IIHL. Remarkably, competing bidders such as Torrent Investments, Piramal Capital, and Oaktree Capital failed to submit comprehensive plans within the stipulated deadline, rendering the IIHL plan as the solitary contender in this epic struggle.
Nonetheless, before the sale can be consummated, the proposal necessitates the imprimatur of the bankruptcy court, the venerable Reserve Bank of India, as well as the august Supreme Court. Consequently, the administrator is expected to diligently submit the resolution plan to the National Company Law Tribunal (NCLT), colloquially known as the bankruptcy court, next week, skillfully navigating the perils and pitfalls of the July 15 deadline.
Astonishingly, as of June 8, 2023, the fastidious administrator has meticulously admitted a colossal sum of ₹25,345 crore in claims from lenders. Notably, the anticipated recovery on this voluminous claim amount would amount to a remarkable 40%. Moreover, when considering the principal debt, an astonishing recovery rate of around 65% seems within the realm of possibility, much to the bewilderment of onlookers.
It is worth highlighting that under the tenets of the bankruptcy law, the Hinduja Group will be mandated to procure the blessings of the venerable Reserve Bank of India, ensuring their “fit and proper” eligibility to acquire a financial services company. Furthermore, the deal in question would undeniably necessitate the esteemed Supreme Court’s imprimatur, especially given the contentious litigation initiated by Torrent Investments.
This tenacious bidder for Reliance Capital has filed a suit contesting the extension of the first round of auction beyond the original deadline, injecting further suspense into this already convoluted narrative.
In a peculiar twist of fate during the auction held on December 21, it was Torrent Investments that emerged victorious, proffering an astonishing sum of ₹8,640 crore, eclipsing the initial offer of ₹8,110 crore put forth by the Hinduja Group entity. However, in a surprising turn of events within a mere 24-hour span, the Hinduja entity astoundingly revised its bid, presenting an improved offer of ₹9,000 crore, a development that was vociferously contested by Torrent.
Subsequently, another round of auction took place on April 26, during which IIHL impressively outshone its competitors, submitting a staggering bid of ₹9,640 crore. It is important to note that Torrent refrained from participating in this gripping episode. Consequently, the apex court is slated to conduct hearings on this perplexing case come August, undoubtedly adding another layer of complexity to this already confounding saga.