Mumbai: The National Company Law Tribunal has approved the Rs 9,650-crore resolution plan submitted by Hinduja’s IndusInd International Holdings (promoter of IndusInd Bank) for bankrupt Reliance Capital.
IIHL will bring in upfront Rs 9,650 crore in cash within 90 days of approval of the resolution plan. This will give the company control of Reliance Capital, which has functioning subsidiaries in life and general insurance, as well as entities in securities broking and wealth management.
Of the Rs 9,650 crore IndusInd Holdings will bring, secured financial creditors who voted in favour of the resolution plan will receive Rs 9,247 crore — 43% of their admitted claims of Rs 22,122 crore.
Of the remaining amount, unsecured financial creditors will receive around 4% of their claims, while operational creditors will receive nearly 4.4% of their claims. Most of Reliance Capital’s creditors are investors in the company’s bonds. They include LIC and EPFO.
The Hindujas will have to file an application with Irdai for a change in ownership of Reliance General Insurance and Reliance Nippon Life Insurance. They have already applied for a change in ownership of Reliance Securities, Reliance Wealth Management, and Reliance Capital.
Two registered valuers placed Reliance Capital’s average liquidation value at Rs 13,158 crore and the average fair value of the corporate debtor at Rs 16,696 crore after lender to Reliance Capital initiated the corporate insolvency resolution process in Dec 2021.
Following the appointment of an interim resolution professional and the constitution of the committee of creditors in the same month, the invitation for expressions of interest went out from the lenders in Feb 2022. The committee of creditors released the final list of eligible prospective resolution applicants in April 2022.
