IndusInd International Holdings (IIHL), the winning bidder to take over Reliance Capital Ltd has transferred Rs 2750 crore to a designated escrow amount in line with the National Company Law Tribunal (NCLT) directions, one person with the direct knowledge of the transfer said.
“The money was received on Saturday morning which is what the court had directed. IIHL has also given a binding term sheet by banks which has details of the loans they will raise to finance the transaction,” this person said.
This transfer is the first step in the Hinduja’s bid to take control of Anil Ambani’s Reliance Capital which was referred to the insolvency process by the Reserve Bank of India (RBI) in November 2021 and ends more than a week of sparring between IIHL and Vistra on the payment of the money.
On Thursday a NCLT bench, comprising Justices Virendrasingh G Bisht and Prabhat Kumar, directed IIHL to implement the resolution plan by August 10 and deposit the equity component of Rs 2,750 crore in an escrow account designated by the committee of creditors (CoC).
According to the resolution plan submitted by IIHL, Rs 250 crore was supposed to be transferred to a domestic account and Rs 2500 crore was to be transferred to an offshore escrow account designated by the CoC as part of the fund infusion by IIHL. The company also had to show Rs 7300 crore of term sheets for loans raised to fund the transactions. All these directions were according to the earlier order of NCLT on July 23.
“The money has also been arranged to complete the debt side of the transaction,” said a banker involved in the process. “It is a complex transaction so it took time but now we can say that the money is there and tied up,” this banker said.
In June Bloomberg reported that UK based Barclays Plc and domestic wealth manager 360 ONE have been appointed as arrangers and underwriters for this bond issuance. Both these firms were understood to have been in touch with private credit funds to raise funds for IIHL according to the report. Barclays and 360 ONE could not be reached immediately.
Also in June ET reported that the Hinduja group is looking to raise Rs 7,500 crore funds from a mix of domestic and overseas private credit funds at 15%. Domestically, Hinduja plans to raise Rs 3,500 crore from investors, including 360 ONE, offering a 15% return. For the overseas segment, they are in discussions with private credit funds such as Cerberus and Edelweiss. Alternatives, offering 15% plus withholding tax coming to a total cost of 16.5% after tax.
IIHL, administrator Y Nageswara Rao and Vistra ITCL (India) the trustee to bond holders which control 96% of the debt in Reliance Capital did not reply to separate emails seeking comment.
IIHL’s bid of Rs 9,861 crore to acquire Reliance Capital was approved by a majority of creditors in June last year. Reliance Capital, is the holding company for majority stakes in insurance firms, an asset reconstruction company, a brokerage firm and a partial stake in a commodity exchange, all part of the Anil Ambani-controlled Reliance Group.
It was referred to insolvency by the Reserve Bank of India (RBI) in November 2021 and owes creditors about Rs 23,666 crore of debt, 96% of which is held by bondholders represented by Vistra.
