Lenders vote in favour of Hinduja offer for bankrupt Reliance Capital

Almost 99 per cent of Reliance Capital lenders have voted in favour of a Hinduja group company IndusInd International Holdings’ resolution plan for the bankrupt firm and are likely to receive Rs 9,661 crore.

Voting for the Hinduja plan concluded Thursday. After the cash balance in Reliance Capital’s books, lenders will receive Rs 10,200 crore for distribution as against Rs 16,000 crore principal secured debt. It would result in 65 per cent recovery for the lenders, said banking sources.

The Reliance Capital insolvency administrator plans to file the Hinduja company’s resolution plan with the National Company Law Tribunal (NCLT) Mumbai next week, said a source.

The transaction will depend on the Supreme Court decision on a petition filed by Ahmedabad-based Torrent, which has objected to lenders conducting a second auction for Reliance Capital. In the first auction held last December, Torrent was the highest bidder for Reliance Capital with an offer of Rs 8,640 crore.

Reliance Capital, once owned by Anil Ambani, was sent for debt resolution in November 2021 after it defaulted on loans worth Rs 24,000 crore. Several companies expressed interest initially but most of them did not give binding offers later.

The Hinduja offer is far below Reliance Capital’s liquidation value of Rs 13,000 crore. All lenders will get an equal amount from the Hinduja offer. This decision is expected to mitigate inter-creditor dispute among the lenders, thus ensuring a smoother resolution process.

A banker said they expect to complete the entire process by submitting the resolution plan to the National Company Law Tribunal (NCLT) by mid-July.

A source in Torrent said it kept off the second auction because there was no clarity over the process and its concerns were not addressed. In a letter to Reliance Capital’s committee of creditors (CoC), Torrent reiterated its stand on the “illegality” of a second auction.