According informed sources, CoC in today’s meeting has taken a tough stand and informed Hinduja Group to make the payment by 27th May or action in accordance with the RFRP will be taken whereby CoC can. encash performance bank guarantee of almost Rs. 500 crore and cancel the letter of approval LOA
Mumbai:
With Hinduja group having crossed the final hurdle in their efforts to acquire the insolvent Reliance Capital Limited after insurance regulator IRDAI approved their revised deal, the Committee of Creditors(CoC) want Hinduja group to complete the payment of Rs 9661 by May 27, a deadline set by the National Company Law Tribunal( NCLT).
However, Hinduja Group had a meeting with CoC on Wednesday to request them time beyond the deadline of 27th May for making payment for takeover of RCL and have justified it as it is permitted under the law.
This development, post the receipt of IRDAI approval, comes as a surprise as Ashok Hinduja, chairman, IndusInd International Holdings Ltd(IIHL), in his recent media interaction had assured that the group has already arranged the necessary funding and will make payment to the CoC within 48 hours of receipt of IRDAI approval.
“The funding of Rs 9,650 crore will have 25 per cent of equity, 75 of debt. If tomorrow, I get the approval from the IRDAI, I will be ready in 48 hours, within the 27th of May, to make the payment,’’ Hinduja had said at a recent media meet.
According informed sources, CoC in today’s meeting has taken a tough stand and informed Hinduja Group to make the payment by 27th May or action in accordance with the RFRP will be taken whereby CoC can encash performance bank guarantee of almost Rs. 500 crore and cancel the letter of approval (LOA).
It is also understood that the CoC has sought proof of the availability of funds from the Hinduja group.
EPFO, LIC and other provident funds own over 50 per cent of the total debt of Reliance Capital.
With the IRDAI approvals for all major changes in the entire corporate structure, the 27 May deadline seems to be possible now as the getting green signals from other regulators like Reserve Bank of India, Sebi and Competition Commission of India , which had already approved it, are a matter of formalities, said sources.
Apart from expanding the existing life and general insurance business of the insolvent RCL, Hinduja group’s IIHL will be keen to revive its defunct health Insurance company, Hinduja had said while announcing the company’s ambitious plans to achieve a valuation of $50 billion by 2030 after acquiring RCL.
The NCLT on February 27, 2024, approved Hinduja Group firm IIHL’s Rs 9,650-crore resolution plan for Reliance Capital.
In November 2021, the RBI superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.