US-based Oaktree, JC Flower, 6 suitors in fray to buy debt-ridden Reliance CapitalPage Visited: 16
December 1 was the last date for submission of EOIs for the stake sale and in all 60 different bids have been received by SBI Capital Markets and JM Financial Services, the advisors to the lenders.
As many as eight suitors, including the US-based Oaktree and J C Flower, have expressed their interest to acquire Reliance Capital Ltd (RCL), a part of debt-ridden Anil Ambani-promoted Reliance Group, sources said.
Expressions of Interest (EOIs) were invited for all or part of RCL’s stake of subsidiaries Reliance General Insurance, Reliance Nippon Life Insurance Company, Reliance Securities, Reliance Financial Ltd and Reliance Asset Reconstruction Ltd. Monetization process is run under the aegis of Committee of Debenture Holders and the Debenture Trustee Vistra ITCL India Ltd which represents 93 per cent of total outstanding debt of RCL pegged at Rs 20,000 crore, sources said.
December 1 was the last date for submission of EOIs for the stake sale and in all 60 different bids have been received by SBI Capital Markets and JM Financial Services, the advisors to the lenders. As many as 18 bids were received for 100 per cent stake of Reliance General Insurance, sources said, adding, some prominent investors who have shown interest are Chryscap, J C Flower, Blackstone, CVC Capital Partners, KKR, and Bain Capital.
The company proposes to exit from 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 51 per cent 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 holds 49 per cent shareholding, has a paid-up capital of Rs 1,196 crore at the end of September 30, 2020.
Dabur Investments, Bandhan Bank, Bain Capital, NIIF, Arpwood Partners, and some domestic mutual funds have shown interest in picking up 51 per cent stake of RCL in Reliance Nippon, sources said. The life insurer with asset under management of Rs 21,912 crore at the end of September had posted a profit of Rs 35 crore during 2019-20.
Besides, it plans to sell 100 per cent stake in broking arm Reliance Securities and RBI-registered NBFC Reliance Financial engaged in the business of financing, money lending, capital market linked financing activities.
For Reliance Securities, there are 8 bidders, including Bain Capital, Religare Broking and Edelweiss Securities while Blackstone, Bain Capital, Arpwood Partners are among six for Reliance Asset Reconstruction Company for 49 per cent stake for RCL. Reliance Asset Reconstruction Company’s portfolio stood at Rs 1,996 crore as of September 30, 2020.
As far as Reliance Health is concerned, sources said, there are 8 bidders including Blackstone, Bain Capital, Arpwood Partners. The advisors have received bids for portfolio investments in Naffa Innovations Pvt Ltd, and Paytm E-Commerce Pvt Ltd.
It has 20 per cent stake in Indian Commodity Exchange, a SEBI-regulated commodity derivatives exchange, on sale. Other key shareholders in ICEX are Central Warehousing Corporation, MMTC, Indiabulls Housing Finance, Indian Potash and Bajaj Holdings and Investments. Last week, the company again defaulted on interest payment on outstanding loans from HDFC Ltd and Axis Bank.
The principal amount due 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 work out to Rs 679.23 crore, including accrued interest up to August.
“The total financial indebtedness of the listed entity including short-term and long-term debt totals Rs 19,805.7 crore, including interest accrued up to August 31, 2020,” RCL had said in regulatory filings recently. In July, the company had said it has defaulted in repayments to lenders and debenture holders and incurred losses during the June quarter, which indicate that material uncertainty exists that may cast a significant doubt on the company’s ability to continue as a going concern.