Reliance Capital Crisis: Committee of Creditors Raises Concerns Over ₹7,300 Crore Debt Plan from Hinduja Group

Sunday, 25 August 2024, 05:09

Reliance Capital lenders have raised significant red flags regarding the ₹7,300 crore debt proposal submitted by the Hinduja Group's IndusInd International Holdings Ltd. The committee of creditors is particularly concerned about stringent terms that complicate the timely funding required for the company's resolution plan approved by NCLT. With delays affecting execution, creditors demand additional clarity from IIHL, creating tension in the resolution process.
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Reliance Capital Crisis: Committee of Creditors Raises Concerns Over ₹7,300 Crore Debt Plan from Hinduja Group

Reliance Capital Creditors Express Concerns

The Committee of Creditors (CoC) for Reliance Capital has flagged several issues with the term sheets submitted by IndusInd International Holdings Ltd (IIHL), linked to the Hinduja Group. The proposed debt raise of ₹7,300 crore raises alarms due to stringent conditions outlined.

NCLT Involvement and Required Documentation

Earlier this month, the National Company Law Tribunal (NCLT) instructed IIHL to submit the necessary term sheets to creditors as a part of the resolution plan. Although IIHL agreed to this requirement, complications have arisen from delays and concerns regarding the execution of these agreements.

  • Creditors' Concerns: The CoC's biggest worry centers around the conditions attached to the funding, many of which are contingent upon the already stalled execution of the resolution plan.
  • Funding Conditions: Key conditions demand significant actions from IIHL, including equity pledges and shareholding transfers.
  • Need for Clarity: Creditors are requesting definitive documents from IIHL to better understand the strings attached to their substantial financing proposal.

Future Implications for Reliance Capital

As IIHL seeks to raise this huge sum—split between 360 One and Barclays—creditors are increasingly anxious. Any default from IIHL could have severe implications, including the forfeiture of a crucial equity component valued at ₹2,750 crore.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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