Reliance Capital bidders flag multiple legal issues over Rs 20,000 crore liability

As the deadline for submitting binding bids approaches, Reliance Capital’s bidders including Hinduja, Torrent, Zurich and Piramal have reported several legal issues to the lenders and the manager, with dependency capital and its subsidiaries.



These legal issues entail cumulative liability of Rs 22,000 crore, and they need a swift resolution for the successful conclusion of the CAP resolution plan.

According to sources, the bidders will likely impose a condition precedent on any payment to the lenders.

The two major issues highlighted by the bidders are the impending resolution of Reliance Home Finance Ltd (RHFL) and the legal battle between the Administrator and IDBI Trusteeship for the control of Reliance General Insurance‘s shares, which is pending with the NCLT.

Authum Investment and Infrastructure Ltd was selected as the successful bidder for RHFL in June 2021, but the settlement process has not yet been completed due to several lawsuits involving the bondholders. The total debt of RHFL is Rs 11,500 crore.

With regard to Reliance General Insurance, the independent actuary Tower Watson has valued this company at Rs 9,500 crore.

Apart from these, the two other lawsuits highlighted 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 arbitration of Nippon Asset Management was involved. shares. The total liability in this case is Rs 650 crore.

The closing date for submitting binding bids is November 28.

The prompt resolution of these legal matters is a challenge for the administrator for the successful completion of the GRP resolution plan.

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

Torrent, IndusInd, Oaktree, Cosmea Financial, Authum Investment and B Right Real Estate have submitted bids in the range of Rs 4,000 crore to Rs 4,500 crore for the entire assets of Reliance Capital.

For Reliance General Insurance business, Piramal Finance has bid Rs 3,600 crore while: Zurich Insurance‘s bid is Rs 3,700 crore.

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

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

For other miscellaneous assets of Reliance Capital, 3 bidders — Choice Equity, Global Fincap and Grand Bhawan — have submitted the bids.

life insurance activities of the CAP, RNLIChad not received an offer, but later Aditya Birla Capital and Nippon Life Insurance, which already owns 49 percent equity stake in RNLIC, expressed interest in acquiring RCAP’s 51 percent stake in this company.

At the start of Reliance Capital’s resolution process, more than 54 companies had filed Expression of Interest (EOI) for the various assets, of which only 14 are now in contention.

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