This group seeks Rs 8000 crore loan to buy Anil Ambani’s debt-ridden Reliance firm, needs to pay Rs…

Anil Ambani, the younger brother of India’s richest man Mukesh Ambani, is one the rise again. His firm Reliance Power has been performing significantly well on the stock market. In the past few days, share prices of Anil Ambani’s Reliance Power touched the upper circuit after the industrialist settled the debt of three major banks. However, the same can’t be said for Reliance Capital. 

Anil Ambani’s debt-ridden Reliance Capital secured a buyout offer of Rs 9650 crore from Hinduja Group. Although the group's acquisition of Reliance Capital is pending necessary court and regulatory approvals, it is reportedly planning to borrow Rs 8000 crore from major Japanese banks for purchase of Anil Ambani’s company.

According to a report by the Economic Times, Hinduja Group is in talks with three Japanese banks - Mizuho, SMBC and MUFG to borrow Rs 8000 crore to acquire Anil Ambani’s Reliance Capital under the bankruptcy code. The group aims to secure the loan before the May 27 deadline set by a bankruptcy court to close the deal. Hinduja Group wants five year loans at an interest cost of 8-9% a year.

The report suggests that Japanese banks will likely derive comfort from Reliance Capital's partnership with Nippon Life. For those who are unaware, the two together run a life insurance joint venture in India.