NEW DELHI: The National Company Law Tribunal (NCLT) on Tuesday approved the Rs 9,650 crore resolution plan of IndusInd International Holdings Ltd (IIHL), a Hinduja Group entity, to acquire the bankrupt Reliance Capital Ltd. As per the tribunal, the resolution plan can be implemented within 90 days of receiving the approval.
“In continuation of our intimation vide our disclosure dated February 26, 2024, we hereby inform you that the NLCT, Mumbai, has orally pronounced an order dated February 27, 2024, approving the resolution plan submitted by IndusInd International Holdings with respect to the corporate insolvency resolution process of the company under section 31 of the IBC,” Reliance Capital said in a regulatory filing on Tuesday.
The RBI in November 2021 had superseded the board of Reliance Capital on governance issues and payment defaults by the company. The central bank had appointed Nageswara Rao Y as the administrator, who invited bids in February 2022 for the company to have a new owner.
Reliance Capital, which had a debt of over `40,000 crore, initially received bids with resolution plans from four applicants -- Torrent Investments, IIHL, Cosmea Financial-Piramal Group and Oaktree Capital. However, the committee of creditors (CoC) rejected all four plans for lower bid values and a challenge mechanism was initiated wherein IIHL and Ahmedabad-based Torrent Investments participated.
In July 2023, IIHL, the promoter of private lender IndusInd Bank, placed a bid of Rs 9,861 crore to acquire Reliance Capital, which was subsequently approved by the administrator. Hinduja’s offer received an overwhelming support from creditors with 99% of them voting in favour. Reliance Capital’s cash balance of an additional Rs 500 crore would also go to the lenders.
Hinduja’s bid and the insolvency process, however, are being challenged by Torrent Investments .