The Anil Ambani-led Reliance Capital Limited (RCL) announced on Wednesday that its shares might be delisted from stock exchanges as part of the approved resolution plan.
Notably, the trading in the stock has been restricted, and the shares of Reliance Capital last traded on February 26 when they declined 4.46% to Rs 11.79.
RCL has said in a exchange filing that the National Company Law Tribunal (NCLT) in its approved resolution plan for the firm is contemplating delisting of existing equity shares from the exchanges.
Under ‘Proposed steps to be taken by the incoming investor/acquirer for achieving the Minimum Public Shareholding’, it said: “Not applicable, since the Approved Resolution Plan contemplates delisting of existing equity shares.”
Will Reliance Capital Limited shareholders get any payments?
A significant question that erupts amid this development is that whether the shareholders will get any payments or not after the Reliance Capital Limited’s delisting.
On this, the company has stated that “The equity shares of RCL will stand delisted from the stock exchanges in accordance with the order of the NCLT read with Sebi Delisting of Equity Shares Regulations, 2021. The liquidation value of the equity shareholders of RCL is nil, and hence, equity shareholders will not be entitled to receive any payment, and no offer will be made to any shareholder of RCL.”
The entire existing share capital of RCL is proposed to be cancelled and extinguished for nil consideration by virtue of the NCLT approval order, such that IIHL and/or the Implementing
Entity, and its nominees, are the only shareholders of the corporate debtor, the company said.
The stock exchanges shall take all necessary actions to delist the equity shares of RCL in accordance with the approved resolution plan read with applicable law, including, but not limited to, the Sebi (Delisting of Equity Shares) Regulations, 2021, as amended, and shall pass necessary orders/directions to this effect, it added.
What could be the next for Reliance Capital?
The NCLT has approved on Tuesday the resolution plan put forth by IndusInd International Holdings, an affiliate of the Hinduja Group, for Reliance Capital.
“The resolution plan provides for the implementation of the terms thereof within a period of 90 days from the approval of the Resolution Plan by the Adjudicating Authority and receipt of certified copy of the order approving the Resolution Plan,” the NCLT notice said.
Notably, the IndusInd International has submitted a proposal of upfront cash payment of Rs 9,650 crore, accounting for 37.03% of the initial amount claimed.
The company has also proposed an amount net of Rs 50 crore for the benefit of the CoC, which will be part of the upfront cash and an additional Rs 11 crore over and above the proposed amount.
In November 2021, the Reserve Bank of India (RBI) took over the board of the Anil Ambani group’s firm following governance issues and payment defaults.
In December 2021, the RBI filed a petition with the tribunal to initiate the Corporate Insolvency Resolution Process (CIRP) for RCL. Nageswara Rao Y was appointed as the administrator, who then invited bids in February 2022 for taking over the company.
