In a big news for Anil Ambani’s bankrupt Reliance Capital, the National Company Law Tribunal (NCLT) has given approval to Britain’s richest family, the Hinduja group, to acquire the Reliance group company and revive it.
IndusInd International Holdings Ltd (IIHL), an entity of Hinduja Group, has received approval from? NCLT, with the Mumbai bench of the NCLT on Tuesday approving the ?9,650 crore resolution plan submitted by IIHL in June 2023, in the second round of bidding for the debt-laden company of Anil Ambani, which is reeling under Rs 40,000 crore debt.
This comes after the Reserve Bank of India (RBI) superseded the board of Reliance Capital on November 30, 2021, because of payment defaults as well as governance issues. The RBI designated Nageswara Rao Y as the administrator of the company's corporate insolvency resolution process (CIRP), and in February 2022, the administrator will solicit bids for the company's sale, as per Fortune report.
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Over the past two years, there have been ups and downs in RCap's debt resolution process. Six applicants—Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment, and B Right Real Estate—had reportedly submitted resolution plans in the range of ?4,000 crore to ?4,500 crore in the first round of auction for purchasing RCap's stressed assets. However, the committee of creditors (CoC) rejected the bids, citing lower values.
The CoC made the decision to hold an online auction, with ?6,500 crore as the starting bid price. Torrent Investment outbid IIHL's ?8,110 crore bid to win the e-auction with the highest bid of ?8,640 crore. After the auction, the Hinduja Group company did, however, submit an updated bid of ?9,000 crore.
Torrent filed a challenge against Hinduja Group's revised bid in both the NCLT and the Supreme Court. Following the Mumbai bench of the NCLT's decision in favor of Torrent, the CoC appealed the decision in the NCLAT. In order to maximize their profit from the sale of Reliance Capital, the lenders were permitted to hold a second round of bidding by the NCLAT, which overturned the Mumbai bench's decision.?
After Reliance Communications, Reliance Naval, and Reliance Engineering, RCap became the third company in the Anil Ambani group to file for bankruptcy, with a debt of approximately ?40,000 crore. Anil Ambani left the group companies' board in March 2022 after being barred by the Securities and Exchange Board of India (SEBI) from interacting with any listed business. In February, it banned him and Reliance Home Finance from the securities market on the grounds that they had embezzled money from the business. Ambani was forced to separate from two listed businesses that are also experiencing financial difficulties: Reliance Infrastructure and Reliance Power.
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