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Tag: committee of creditors

  • Lenders approve Hinduja Group’s ₹9,661-crore resolution plan for RCap

    Lenders approve Hinduja Group’s ₹9,661-crore resolution plan for RCap

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    The committee of creditors (CoC) of Reliance Capital has approved the resolution plan put forth by IndusInd International Holding, with 99 per cent lenders voting in favour of the plan, sources told businessline.

    Hinduja Group had submitted a bid of ₹9,661 crore, all of which will be paid as upfront cash to acquire Reliance Capital and its subsidiaries. This will be in addition to the cash reserve of about ₹400 crore that RCap has generated by way of loan recoveries, among other avenues, a source said.

    Accordingly, lenders of RCap will receive about ₹10,000 crore against principal outstanding dues of ₹16,000 crore, translating to a recovery of around 65 per cent. Voting on the resolution plan began on June 9 and concluded on Thursday. The plan will now be submitted for approval of the National Company Law Tribunal (NCLT) in 7-10 days, they added. The deadline to file the final resolution plan with NCLT is July 15.

    Hinduja Group via IndusInd International Holdings, was the sole bidder in the extended challenge mechanism for resolution of RCap, submitting a bid of ₹9,650 crore, which included a proposal to infuse ₹300 crore in Reliance General Insurance. The CoC had, in May, voted in favour of equal distribution of proceeds between all members, regardless of whether they are in favour of the resolution plan.

    Meanwhile, Reliance Capital has approached the Supreme Court with the details of the second auction as per the requirements of the pending litigation against Torrent Investments which had alleged preference to the Hinduja Group and had objected to holding the second round of the challenge mechanism.

    The apex court is expected to next hear the case in August; however, with the resolution plan being finalised, the CoC has approached the SC for a hearing sooner than scheduled, businessline had previously reported.

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  • RCap committee of creditors votes for equal distribution of proceeds between members

    RCap committee of creditors votes for equal distribution of proceeds between members

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    The committee of creditors (CoC) of Reliance Capital, on Monday, voted for equal distribution of proceeds between all members, regardless of whether they are in favour of the resolution plan.

    “There are two valuations. One is liquidation value and the other is redistribution value. Here, liquidation value is high, so CoC members were requested that even if someone is dissenting, liquidation value will not be taken and resolution value will be considered for redistribution,” a source told businessline, adding that over 99 per cent of the members voted in favour of this.

    According to this approval, there will now be no distinction between consenting and dissenting members and everyone will get the amount in proportion of their claims. Usually, consenting members are paid as per the resolution value and dissenting members as per the liquidation value.

    The move is reportedly aimed at avoiding any inter-creditor disputes, especially given the delay in the resolution process. Creditors include priority secured creditors, secured creditors, unsecured creditors, and operational creditors.

    Resolution plan

    The CoC is still to finalise the resolution plan, voting for which also take place this week, sources said.

    Once Hinduja Group’s resolution plan has been voted on and approved, CoC will seek the National Company Law Tribunal (NCLT)’s approval for the same, ahead of the deadline of July 15.

    Hinduja Group via IndusInd International Holdings, was the sole bidder in the extended challenge mechanism for resolution of RCap, submitting a bid of ₹9,650 crore, which included a proposal to infuse ₹300 crore in Reliance General Insurance.

    Reliance Capital has approached the Supreme Court with the details of the second auction as per the requirements of the pending litigation against Torrent Investments which had alleged preference to the Hinduja Group and had objected to holding the second round of the challenge mechanism.

    The apex court has not put any restrictions on the resolution process and so the CoC is confident that the legal issue and resolution are separate issues and the NCLT will go ahead with the resolution plan.

    However, now that the resolution process is at the final stages, the CoC has asked the SC for a hearing sooner than the expected timeline of August, sources said.

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  • RCap case:Torrent Invest files plea in Supreme Court against Vistra ITCL post NCLAT order

    RCap case:Torrent Invest files plea in Supreme Court against Vistra ITCL post NCLAT order

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    After the National Company Law Appellate Tribunal (NCLAT) allowed lenders of Reliance Capital to conduct the extended Challenge Mechanism, Torrent Investments has filed a plea in the Supreme Court challenging the order.

    The plea was filed on Tuesday against Vistra ITCL, the debenture trustee acting on behalf of the 90 per cent of the committee of creditors (CoC). Vistra had dragged Torrent Invest to NCLAT after the NCLT on February 2 had ruled in favour of Torrent.

    The plea is likely to admitted in the coming week as the CoC has proposed holding the extended Challenge Mechanism on March 20 as per the NCLAT order which asked to CoC to conduct the second auction after a two-week period.

    Threshold bid

    The CoC has proposed setting the threshold bid amount for participating in the extended challenge mechanism at ₹9,500 crore on an NPV (net present value) basis. The threshold will increase by ₹500 crore for the second round to ₹10,000 crore and by ₹250 crore each for the third and every subsequent round.

    The minimum upfront cash component for bidding under the extended challenge mechanism and Round 1 has been set at ₹8,000 crore.

    The NCLAT had, on March 2, set aside the February 2 order of the Mumbai Bench of the NCLT, thus allowing the CoC of Reliance Capital to hold the second challenge mechanism, and to take “any steps for further negotiations with the Resolution Applicants”.

    A two-member Bench had held that the CoC “is fully empowered” to further negotiate with one or more resolution applicants, even after completion of challenge mechanism on December 21 when Torrent Investments emerged as the highest bidder with an NPV of ₹8,640 crore.

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