8 contenders in scrimmage to buy debt-ridden Reliance Capital

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As many as eight suitors, including US-based Oaktree and JC Flower, have expressed interest in acquiring Reliance Capital Ltd (RCL), part of the debt-ridden Anil Ambani-promoted Reliance Group, sources said. .

Expressions of Interest (EOI) have been solicited for all or part of RCL’s stake in the subsidiaries Reliance General Insurance, Reliance Nippon Life Insurance Company, Reliance Securities, Reliance Financial Ltd and Reliance Asset Reconstruction Ltd.

The monetization process is carried out under the aegis of the Debentureholders Committee and Vistra Debenture Trustee ITCL India Ltd ? which represents 93% of RCL’s total outstanding debt, pegged at Rs 20,000 crore, sources said.

December 1 was the deadline for submitting expressions of interest for the sale of the stakes and a total of 60 different offers were received by SBI Capital Markets and JM Financial Services, the advisers to the lenders.

As many as 18 bids have been received for a 100% stake in Reliance General Insurance, sources said, adding that some prominent investors who have shown interest include Chryscap, JC Flower, Blackstone, CVC Capital Partners, KKR and Bath Capital.

The company is offering to exit its wholly-owned subsidiary Reliance General Insurance Company (RGI) with paid-up capital of Rs 252 crore as of September 30, 2020, sources said, adding that the 51% stake in Reliance Nippon Life Insurance Company is also for sale.

Reliance Nippon Life Insurance, a joint venture with Japan’s largest life insurer, Nippon Life, which owns 49% of the shares, has a paid-up capital of Rs 1,196 crore at the end of September 30, 2020.

Dabur Investments, Bandhan BankBain Capital, NIIF, Arpwood Partners and some domestic mutual funds have expressed interest in buying RCL’s 51% stake in Reliance Nippon, sources said.

The life insurer with assets under management of Rs 21,912 crore at the end of September had posted a profit of Rs 35 crore in 2019-20.

In addition, it plans to sell 100% of its stake in RBI-registered Reliance Securities and NBFC brokerage arm Reliance Financial, which is engaged in finance, money lending and capital market-linked finance.

For Reliance Securities there are 8 bidders including Bain Capital, Religare Broking and Edelweiss Securities while Blackstone, Bain Capital, Arpwood Partners are among the six for Reliance Asset Reconstruction Company for a 49% stake for RCL.

Reliance Asset Reconstruction Company’s portfolio stood at Rs 1,996 crore as of September 30, 2020.

Regarding Reliance Health, according to sources, there are 8 bidders, including Blackstone, Bain Capital, Arpwood Partners.

Advisors have received offers for portfolio investments in Naffa Innovations Pvt Ltd and Paytm E-Commerce Pvt Ltd.

It has a 20% stake in Indian Commodity Exchange, a SEBI-regulated commodity derivatives exchange, for sale. Other key shareholders of ICEX are Central Warehousing Corporation, MMTC, Indiabulls housing financeIndian Potash and Bajaj Holdings and Investments.

Last week, the company again defaulted on interest payments on HDFC Ltd’s outstanding loans and Axis Bank.

The principal amount owed to HDFC is Rs 523.98 crore and to Axis Bank Rs 100.63 crore.

The total amount of outstanding borrowings from banks and financial institutions stands at Rs 679.23 crore including accrued interest till August.

“The listed entity’s total financial indebtedness, including short-term and long-term debt, stands at Rs 19,805.7 crore including accrued interest up to August 31, 2020,” had recently stated RCL in regulatory filings.

In July, the company said it failed to repay lenders and debenture holders and incurred losses in the June quarter, indicating that there is significant uncertainty that could cast material doubt. on the company’s ability to continue as a going concern.

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