Hinduja Group-backed IndusInd International Holdings (IIHL) has filed an intervention application with the Mumbai Bench of the National Company Law Tribunal (NCLT) regarding its acquisition of Reliance Capital (RCap). The application, submitted on Tuesday, outlines IIHL’s readiness to provide Rs 2,750 crore in initial capital for the acquisition. However, several requirements outlined in the resolution plan approved by RCap’s lenders remain unmet.
The resolution plan
IIHL’s proposed resolution plan includes funding through Rs 7,300 crore in borrowings and Rs 2,750 crore in equity. Arrangements with lenders for this funding have been secured. IIHL has stressed the importance of fulfilling various conditions before transferring the funds to the escrow account, including the finalization of a trustee for excluding assets from Reliance Capital, the list and distribution of creditors’ payments, and other formalities related to share capital reduction and escrow agreement creation.
The NCLT has extended the deadline for IIHL to complete these formalities to August 10, following an earlier order requiring Rs 2,750 crore to be deposited by July 31. IIHL had already deposited Rs 500 crore as an initial commitment when it emerged as the highest bidder for RCap.
The Tribunal has scheduled a hearing for early next week to address IIHL’s request for an extension. IIHL’s application emphasizes the need for the resolution of pending activities and the completion of necessary steps by the administrator and committee of creditors (CoC) to finalize the transaction.
Bidding process
In December 2022, IIHL was selected to acquire Reliance Capital after a competitive bidding process. However, the acquisition has faced delays, including legal challenges from the Torrent Group. The NCLT approved IIHL’s resolution plan in February, with a requirement to deposit the equity contribution by July 31. IIHL is also raising the remainder of the acquisition funds through debt.
The company has communicated that its Mauritius-based lenders require additional documentation, such as Know-Your-Customer (KYC) details and certified resolutions, before transferring funds. Once these conditions are satisfied, the funds will be moved to the escrow account.
The NCLT will review the situation next week to determine the next steps and ensure the transaction progresses as planned.
