RCap Lenders Raise Concerns Over Debt Mobilisation for Reliance Capital
Concerns Arise Over IIHL's Rs 7,300 Cr Debt Terms
Lenders to the financially troubled Reliance Capital (RCap) have raised critical concerns regarding the term sheet provided by the Hinduja Group firm IndusInd International Holdings Ltd (IIHL) for mobilising Rs 7,300 crore to facilitate the acquisition process. The committee of creditors (CoC) is apprehensive that the conditions imposed by bankers to IIHL may not be fulfilled until the resolution plan is executed, complicating the fund drawdown necessary for settling RCap's outstanding debts. Sources have indicated that the National Company Law Tribunal has mandated the sharing of these term sheets with the CoC, but the anxiety remains palpable.
Key Terms of Debt Mobilisation
- Pledge of equity shares of RCap issued to IIHL.
- First-ranking hypothecation over all assets of RCap.
- Pledge of 100% shareholding of Reliance Securities Limited with new lenders.
Furthermore, should IIHL default on these terms, the CoC has moved to seek forfeiture of Rs 2,750 crore lying in the escrow accounts. Nageswara Rao, appointed by the Reserve Bank to oversee the administrative process, invited bids to take over RCap, which has been burdened by a staggering debt exceeding Rs 40,000 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.