India

Lenders receive 14 resolution proposals for Reliance Capital

Lenders to (RCap) received 14 resolution plans on Monday as part of the Anil Ambani-founded holding company’s insolvency proceedings. A Piramal Group-led consortium, Oaktree Capital, Torrent Investments, IndusInd International and Cosmea Financial Services are among bidders who have either offered to acquire the entire company or submitted plans for select clusters, said two people aware of the development.

Advent International and Zurich Insurance have bid for 100% stake in

General Insurance (RGI), the people said. The Naveen Jindal group, through Jindal Power, bid for stakes in Reliance Asset Reconstruction Co as well as Reliance Capital. has also bid for the company.

Since Reliance Capital has about 20 financial services companies including securities broking, insurance and an asset reconstruction company (ARC) in its fold, administrator Nageswar Rao Y had given potential applicants a choice to bid for the whole or for subsidiaries and real estate.

The administrator, Piramal, and Torrent Investments did not respond to ET’s queries. Jindal Power, Oaktree and Advent declined to comment.

Zurich Insurance confirmed bidding for the RGI stake.

The administrator had invited binding bids by the end of August 29 (Monday midnight). Submissions were opened at the Sahara Star hotel in Mumbai on Tuesday, the people said.

The Piramal consortium and Oaktree are said to be the front-runners, said one of the persons cited above.

90% of Recoveries Likely from Insurance Cos

The Piramal-led consortium includes APAC Investment IV Ltd, APAC Investment VII Ltd, India Resurgence Fund and PEL Finhold Pvt. If the grouping emerges as the winning bidder, it will be the second acquisition of a financial services company by it under the Insolvency and Bankruptcy Code (IBC) after Dewan

(DHFL). Oaktree was in the fray for DHFL as well. Sam Ghosh, founder promoter of Cosmea Financial Holdings, was heading Reliance Capital for almost nine years until 2017.

The administrator received 54 expressions of interest (EoIs), including applications for Reliance Capital in its entirety and individual units. About 90% of recoveries are estimated to come from life and general insurance companies. Bids for the entire company could range from ₹7,000 crore to ₹8,000 crore, according to a banker’s estimate.

The administrator has verified claims of ₹23,666 crore from financial creditors; the highest is from

followed by . is seeking buyers for its ₹3,400 crore debt exposure in Reliance Capital and has invited binding bids by September 5 from ARCs, as reported by ET on August 22.

Although lenders are proceeding with the sale of Reliance Capital, some investors fear that the process may get hindered if the share pledge of RGI is not released by the debenture trustee, as reported by ET on June 27. This is one reason bidders may make conditional offers, said the banker cited above.

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