The Committee of Creditors (CoC) of Reliance Capital has expressed concern over the term sheets submitted by IndusInd International Holdings Ltd (IIHL), an entity of the Hinduja Group, for a proposed debt raise of ₹7.3 billion rupees.
Earlier this month, the National Company Law Tribunal (NCLT) ordered IIHL to provide the term sheets requested by the lenders as part of the implementation of the resolution plan for Reliance Capital. IIHL has agreed to submit these documents during a meeting of the Monitoring Committee, provided that the confidentiality of the stakeholders is maintained.
However, tensions have arisen between the CoC and the IIHL over delays in the implementation of the resolution plan, which was approved by the NCLT in February.
Creditors’ concerns center on the strict conditions imposed on the loans. ₹Rs 7,300 crore debt offering. Some of these conditions can only be met after the resolution plan is executed, complicating the raising of funds needed to settle payments to Reliance Capital’s lenders.
“IIHL has raised funding on the basis of several conditions which go far beyond the resolution plan. These conditions include transfer of 26% of the shares of the insurance companies to Hinduja Group’s Aasia, delisting of RCAP shares and debentures, creation and perfection of collateral in favour of IIHL’s lenders and issuance of fresh unlisted NCDs of RCAP, etc,” said one of the lenders, speaking on condition of anonymity.
The term sheets also suggest that additional terms and conditions may be introduced into the final binding agreements. Accordingly, the CoC has requested that the IIHL provide these final documents for review.
IIHL has hired 360 One and Barclays to raise funds ₹7,300 crore in debt, with 360 One tasked with raising it ₹5,000 crore and Barclays is responsible for the rest ₹2.3 billion rupees.
Key terms of the term sheet include pledging of equity shares of Reliance Capital Limited issued to IIHL, delisting of existing debentures and capital to facilitate issuance of fresh capital to IIHL and debentures to new lenders, and establishment of a first lien mortgage over all assets of RCapital.
A non-disposal undertaking (NDU) on the equity securities of Reliance Asset Reconstruction Company (RARC) held by RCAP is also proposed, which is required to be executed as a condition precedent, and RCAP is required to file the necessary forms with the DP.
Meanwhile, on Thursday, the CoC filed a fresh application before the Delhi bench of the National Company Law Appellate Tribunal (NCLAT), seeking forfeiture of the equity component of IIHL. ₹2,750 crore in case of default by the Hinduja Group-owned company.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.