As Hinduja Group is in talks to borrow Rs 8000 crore to acquire Anil Ambani’s Reliance Capital under the bankruptcy code, an investor in Reliance Capital has filed a writ petition in the Bombay High Court challenging NCLT order.
Anil Ambani, the younger brother of India’s richest man Mukesh Ambani, has been the part of the news for the past few weeks due to debts settled by Reliance Power. However, Anil Ambani has also been in the news due to the roadblocks in Reliance Capital’s acquisition deal with Hinduja Group’s IndusInd International Holdings (IIHL). To recall, Anil Ambani’s Reliance Capital secured a buyout offer of Rs 9650 crore from Hinduja Group a few months ago. As Hinduja Group is in talks to borrow Rs 8000 crore to acquire Anil Ambani’s Reliance Capital under the bankruptcy code, an investor in Reliance Capital has filed a writ petition in the Bombay High Court challenging NCLT order.
As per a report by Financial Express, the investor stated that the delisting of RCAP shares after completion of the resolution process will result in zero value of the company’s shares. As the liquidation value being nil, shareholders will not get any payment and no offer will be made to RCap shareholders.
“The exemption provided under Regulation 3(2)(b) of the delisting regulations is a departure from past practice and leaves public shareholders who depend on respondent no. 1 (Sebi) in a lurch,” the petition said.” the petition reads.
Earlier this week, in a meeting with senior officials of IIHL, lenders to Anil Ambani’s Reliance said the company will have to pay them Rs 9,650 crore by the said date, a source said. It is noteworthy that the National Company Law Tribunal (NCLT), Mumbai, while approving the resolution plan on February 27, had directed IIHL to implement the resolution plan within 90 days i.e. by May 27. As per the approved resolution plan, IIHL will have to make an upfront payment of R 9,650 crore to the RCAP lenders.
According to sources, lenders expressed concern over the slow progress towards implementation of the RCAP resolution plan, as IIHL is yet to receive key IRDAI approvals on the resolution plan. IRDAI has raised several questions and concerns over the proposed corporate structure to transfer RCAP's insurance businesses to IIHL, and the company has not yet addressed those concerns.
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