Hinduja Group to complete RCap deal by January end: AP Hinduja

Mumbai: Hinduja Group expects to complete $The Rs 9,861-crore acquisition of Reliance Capital in late January came nearly a year after the National Company Law Tribunal (NCLT) approved a bailout package for failed lenders.

Hinduja Group company IndusInd International Holdings Ltd (IIHL), which filed the resolution plan, said it has obtained all regulatory approvals, including approval from the Department for Promotion of Industry and Internal Trade (DPIIT), to complete the acquisition.

“The Administrator and Committee of Creditors (CoC) have to complete certain procedural formalities such as delisting of equity and non-convertible debentures, creation of trust for transfer of excluded assets, reduction of capital, release of all charges on Reliance Capital’s assets etc. This will take approximately four to six weeks time. Therefore, the actual acquisition and transaction will be completed in January 2025,” group chairman Ashok Hinduja told reporters.

Since some IIHL shareholders are residents of Hong Kong, the Special Administrative Region of China, DIPP approval is required. Press Note 3 from the federal government said that if an entity from a country that shares a land border with India, or is a citizen or permanent resident of any such country, is the beneficial owner of an investment in India, it must first obtain government approval.

Awaiting regulatory approval

The transaction has been awaiting regulatory and legal approvals after being approved by the NCLT Mumbai Bench on February 27, 2024. Lenders suspect IIHL is delaying implementation citing lack of clearances.

In May this year, AP Hinduja had said that no further regulatory or judicial approval would be required other than a license from the Insurance Regulatory and Development Authority of India (IRDAI) and once approved, the group could make payments within 48 hours.

However, the payment was delayed as the group was unable to raise funds before the end of the NCLT deadline in May. Since then, the IIHL has successfully frozen the value $73 billion rupees. it raised $Raised Rs 4,300 crore through sale of 42-month high-yield bonds from Barclays Capital and 360 One, remaining funds $3,000 crore from 360 One.

Considering divestment

“quantity $Rs 2,750 crore has been paid and deposited with the creditors committee. additional amount through debt $Rs 3,000 crore has been raised and kept in a separate account pending the conclusion of certain activities. debt $Rs 4,300 crore is ready to be disbursed after the Reliance Capital shares are delisted from the stock exchanges. ” Hinduja added.

Sharing his thoughts on future strategy, Hinduja explained that the group is looking to divest 34 of Reliance Capital’s 39 subsidiaries as they are mostly small shell entities with small businesses. He said Hinduja will run the business with the existing management of Reliance Capital while also inducting new board members in the holding company. He also said the group was willing to attract minority investors to join.

“There are a lot of interested parties coming into holding companies in Mauritius as minority shareholders because they see the value in it. So, I have to see the value that IIHL brings to my shareholders. So, anyone who comes in as a minority investor Investors who come, whether at that level or at the subsidiary level, are always welcome because I will give that freedom,” Sinduja said.