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Tag: resolution plan

  • 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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  • SC clears the way for Authum Invest to acquire Reliance Home Finance

    SC clears the way for Authum Invest to acquire Reliance Home Finance

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    The Supreme Court on Friday ruled against Bombay HC’s December 2022 order dismissing the plea with respect to takeover of Reliance Home Finance by Authum Investments and Infrastructure.

    Citing the similar case of Securities and Exchange Board of India vs Rajkumar Nagpal and Others, the apex court paved the way for the acquisition saying that the dissenting debenture holders should be provided an option to accept the terms of the resolution plan which proposed the takeover.

    “Alternatively, the dissenting debenture holders will have a right to stand outside the proposed RP framed under the lender’s ICA (inter-creditor agreement) and pursue other legal remedies to recover their entitled dues,” the SC said in its order as accessed by businessline.

    The SC asked Authum Investments to make the required payments by March 31.

    SEBI’s objections

    Authum Investments had on Monday told the top court that it is ready to implement the ₹2,887-crore resolution plan for Reliance Home Finance by March 31. However, SEBI had opposed the same alleging violation of its guidelines on voting process for debenture holders.

    “We find that a different voting mechanism proposed under the SEBI Circular will further delay the resolution process and potentially disrupt the efforts undertaken by the stakeholders, including the retail debenture holders,” the order said, adding that such unscrambling of the resolution process will be both time-consuming and may affect the agreed realised gains to the retail debenture holders, who have already consented to the negotiated settlement before the High Court.

    The apex court, therefore, allowed for the resolution plan to go through in order to protect the debenture holders, except the dissenting debenture holders, it said. 

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