IIHL has appointed 360 One and Barclays to raise Rs 7,300 crore through debt. Of this, 360 One has been mandated to raise Rs 5,000 crore, while Barclays is raising Rs 2,300 crore.
Lenders of debt-laden Reliance Capital (RCAP) have expressed concern over the term sheet provided by Hinduja Group firm IIHL for mobilising debt of Rs 7,300 crore to fund the acquisition.
The committee of creditors (CoC) has expressed concern over the fact that bankers of IndusInd International Holdings Ltd (IIHL) have imposed numerous conditions for offering Rs 7,300 crore debt and some of these conditions can only be fulfilled by IIHL after the resolution plan is executed, sources said.
This makes the extraction of funds required to settle payments to RCAP debtors for the resolution plan virtually impossible, the sources said.
A message to the IIHL seeking comment on the matter went unanswered until the news broke.
In addition, the sources said, the term sheets indicate that additional terms and conditions could be introduced into the final binding agreements.
The CoC has requested that the IIHL also provide these final documents for review, they said.
Notably, IIHL is raising Rs 7,300 crore through debt to fund the RCAP resolution plan, while the balance of Rs 2,750 crore through equity or cash that IIHL has deposited in the escrow accounts of the COC.
IIHL has appointed 360 One and Barclays to raise Rs 7,300 crore through debt. Of this, 360 One has been mandated to raise Rs 5,000 crore, while Barclays is raising Rs 2,300 crore.
According to sources, the term sheets worth Rs 7,300 crore were shared with the CoC following the directions of the National Company Law Tribunal in Mumbai.
Key conditions in the terms and conditions for the withdrawal include the pledge of equity shares of RCAP issued to IIHL, a first lien mortgage on all assets of RCAP and the pledge of 100 per cent equity participation by Reliance Securities Limited with the new lenders.
Meanwhile, the CoC has also filed an application with the NCLAT seeking forfeiture of IIHL’s Rs 2,750 crore lying in escrow accounts, in case of default.
The CoC also requested the court to direct IIHL to pay the interest on the debt component of Rs 7,300 crore from August 8 till the actual date of payment.
In November 2021, the Reserve Bank had superseded the board of Reliance Capital over governance issues and payment defaults by the Anil Dhirubhai Ambani Group company.
The central bank had appointed Nageswara Rao Y as administrator, who invited bids in February 2022 to take over the company.
Reliance Capital had a debt of over Rs 40,000 crore, and four applicants had initially bid with resolution plans.
However, the creditors’ committee rejected all four plans for lower bid values and a challenge mechanism was initiated involving IIHL and Torrent Investments.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 25, 2024 | 19:13 IS
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