Oaktree, Others Bid For Reliance Cap


Oaktree Capital, Hinduja Group, and Torrent, an Ahmedabad-based consortium led by Piramal and Cosmea Financial, have submitted resolution plans for debt-laden Reliance Capital (RCap).

UV ARC is the only one of these five bidders who has bid on a fee basis, which means it has not submitted any RCap resolution plans. On Monday, the deadline for submitting bids expired.

Meanwhile, Zurich Insurance and Advent International, both of which had previously submitted non-binding bids for Reliance General Insurance Company (RGIC) in the initial round, have opted out of the final round. There were no separate bids for Reliance General Insurance Company or Reliance Nippon Life Insurance Company (Reliance Nippon Life).

During the first round of bidding, Advent made a non-binding bid of Rs 7,000 crore for RGIC. The other two bidders were 50 per cent lower, with Piramal quoting around Rs 3,600 crore and Zurich offering Rs 3,700 crore.

Furthermore, Aditya Birla Sun Life Life Insurance and Nippon Life Insurance of Japan, which were competing for RCap’s 51 per cent stake in the life insurance business, have not made any bids for Reliance Nippon Life.

Nippon Life Japan has also failed to submit a bid to increase its stake in the company from 49 per cent to 74 per cent, as previously planned.

The Committee of Creditors (COC) design to stitch an Option -1 plan by combining the different bids of RCap clusters fails in the absence of separate bids for RGIC and Reliance Nippon Life, according to the person quoted above.

The goal of the cluster bidding was to first obtain separate bids for RGIC and Reliance Nippon Life, which account for more than 90 per cent of the total RCap value, and then stitch them together so that option 1 bidders could compete against them.

On November 2, the RCap bidders requested that the Anil Ambani group company’s multiple legal issues totaling Rs 20,000 crore be resolved before the resolution plan was completed. The bidders, which included a consortium led by Piramal Enterprises, Hinduja Group, and Zurich Insurance, filed for bankruptcy against both the lenders and the administrator, hoping to resolve the issue “immediately.”

In December of last year, Reliance Capital, the financial services holding company of Anil Ambani’s Reliance Group, became the fourth financial services firm to be admitted for insolvency by the National Company Law Tribunal’s Mumbai bench (NCLT). Previously, Dewan Housing Finance Corporation (DHFL) was taken up for insolvency in November 2019 and two Srei Group firms were taken up for insolvency in October.

Brookfield, Ares SSG Capital, Edelweiss, Blackstone’s asset reconstruction arm, Multiples private equity, JC Flowers and Co, True North, and TPG were among the 55 prospective resolution applications (PRAs) that submitted expressions of interest (EOIs) to acquire RCap and its assets earlier this year.

Reliance Capital has over Rs 90,000 crore in assets under management (AUM), over one crore customers, and 18,000 employees.

Categories: Other News

Leave a Reply Cancel reply