Reliance Capital bidders report multiple legal issues involving Rs 20,000 crore liability | Techno Glob

Mumbai: As the deadline for submission of binding bids approaches, Reliance Capital bidders including Hinduja, Torrent, Zurich and Piramal have reported various legal issues to the lenders and the administrator, involving Reliance Capital and its subsidiaries.

These legal issues involve a cumulative liability of Rs 22,000 crore, and they need prompt resolution for the successful closure of RCAP’s resolution plan.

According to sources, the bidders are likely to place a condition precedent on these issues to any payment to the lenders.

The two big issues reported by bidders are the impending resolution of Reliance Home Finance Ltd (RHFL) and the legal battle between the trustee and IDBI Trusteeship for control of shares in Reliance General Insurance, which is pending in the NCLT.

Authum Investment and Infrastructure Ltd had been selected as the successful bidder for RHFL in June 2021, but the resolution process is not yet complete due to various disputes involving debenture holders. RHFL’s total debt is Rs 11,500 crore.

As for Reliance General Insurance, independent actuary Tower Watson has valued this business at Rs 9,500 crore.

Apart from these, the other two court cases reported by the bidders are Axis Bank’s claim of Rs 150 crore against Reliance Capital, which the bank lost in the NCLT, and a case involving Administrator and IndusInd Bank, involving the arbitration of Nippon Asset Management. shares. The total liability in this case is Rs 650 crore.

The deadline for submitting firm offers is November 28.

Prompt resolution of these legal issues is a challenge for the Administrator to successfully close out the RCAP resolution plan.

Reliance Capital had received 14 non-binding offers for its multiple businesses. Six companies submitted bids for the entire company, while the remaining bidders submitted bids for its multiple subsidiaries.

Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment and B Right Real Estate have submitted bids ranging from Rs 4,000 crore to Rs 4,500 crore for all of Reliance Capital’s assets.

For Reliance General Insurance business, Piramal Finance has offered Rs 3,600 crore, while Zurich Insurance’s offer is Rs 3,700 crore.

The third bidder, Advent, offered Rs 7,000 crore for Reliance General Insurance.

Jindal Steel and Power and UVARC submitted bids for Reliance Capital’s ARC business.

For Reliance Capital’s other miscellaneous assets, 3 bidders – Choice Equity, Global Fincap and Grand Bhawan – submitted bids.

RCAP’s life insurance business, RNLIC, had not received any offers, but later Aditya Birla Capital and Nippon Life Insurance, which already owns 49% of RNLIC’s capital, expressed interest in acquiring RCAP’s 51% stake in this venture.

At the start of Reliance Capital’s resolution process, more than 54 companies had submitted an Expression of Interest (EOI) for its various assets, of which only 14 are currently in the running.

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