Concerned over slow progress, the lenders of debt-ridden Reliance Capital (RCAP) have asked the Hinduja Group arm, IndusInd International Holdings Ltd, to expedite the process of obtaining necessary regulatory approvals and stick to the resolution plan deadline of May 27.
In a meeting held in Mumbai on Friday with the senior officials of IndusInd International Holdings' (IIHL), the lenders of RCAP said the company has to make a payment of Rs 9,650 crore to them by the said date, a source said.
It is to be noted that the National Company Law Tribunal (NCLT) Mumbai, while approving the resolution plan on February 27, directed the IIHL to implement the resolution plan within 90 days i.e. May 27.
Advertisement
As per the approved resolution plan, IIHL has to make an upfront payment of Rs 9,650 crore to the RCAP lenders.
According to the sources, the lenders expressed concerns over the slow progress towards the implementation of RCAP resolution plan, as IIHL is yet to receive the crucial IRDAI approval on the resolution plan.
The IRDAI has raised multiple queries and concerns over the proposed corporate structure for the transfer of RCAP's insurance businesses to IIHL, and the company is yet to address those concerns.
IRDAI approval is crucial for the transfer of insurance businesses of Reliance Capital i.e. Reliance General Insurance and Reliance Nippon Life Insurance, to the IIHL.
Advertisement
The RBI approval on transfer of RCAP business to IIHL also ends on May 17. The approval granted on November 17 was valid for a period of only six months. In case, IIHL fails to complete the resolution process within the timeline, it will have to give reasons of the same to the RBI while reapplying for fresh approval. 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 In November 2021, the Reserve Bank superseded the board of Reliance Capital on governance issues and payment defaults by the Anil Dhirubhai Ambani Group company. The central bank had appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 to take over the company. Reliance Capital had a debt of over Rs 40,000 crore, and four applicants had initially bid with resolution plans. However, the committee of creditors rejected all four plans for lower bid values and a challenge mechanism was initiated in which IIHL and Torrent Investments participated.
Just one email a week