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Informist, Tuesday, Jul 23, 2024

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal today granted an extension to IndusInd International Holdings Ltd over the implementation of the approved resolution plan for Reliance Capital Ltd by Aug 10. However, the tribunal put in place certain conditions while granting the extension to IndusInd International Holdings, a Hinduja Group company.

 

The tribunal asked IndusInd International Holdings to deposit 2.5 bln rupees towards domestic equity in an escrow account in India designated by the committee-of-creditors of Reliance Capital. It also asked IndusInd International to deposit 25 bln rupees in an offshore escrow account designated by the committee-of-creditors as a contribution towards the equity to be invested in Reliance Capital. This amount shall forthwith be brought to India upon receipt of approval from the central government for bringing in foreign equity, the tribunal added.

 

Further, the tribunal asked IndusInd International to submit to the monitoring committee copies of the binding executed term sheets for the loan amount of 73 bln rupees and such loan shall be disbursed to the credit of designated account before the extended date subject to foreign equity component approval in place.

 

IndusInd International shall place all things on record under an affidavit on or before Jul 31. In addition to the committee-of-creditors' entitlement amount, the committee shall also be entitled to any cash recovery arising during the extended period in Reliance Capital net of committee entitlement amount, the tribunal added.

 

"In the event the applicant (IndusInd International) fails to implement the resolution plan within the extended period, the same shall be treated as an event of default and the committee of creditors shall be entitled to take all requisite steps against the applicant," said the tribunal. It clarified that in the event of such a default, the amount of 2.5 bln rupees and 25 bln rupees deposited in escrow account shall be returned to IndusInd International within a period of week therefrom.

 

"On occurrence of event of default, the Committee of Creditors shall be entitled to take all steps for the resolution of the Corporate Debtor in terms of RFRP (Request for Resolution Plan) by inviting all the resolution applicants who had participated in the first challenge mechanism to participate in the fresh challenge mechanism," said the tribunal.

 

In February, the Mumbai bench of the Tribunal had approved IndusInd International Holdings's resolution plan for Anil Ambani-promoted Reliance Capital.

 

Initially, Torrent Investments Pvt Ltd emerged as the highest bidder for Reliance Capital with a resolution plan for 86.40 bln rupees. However, the committee-of-creditors decided to hold a second challenge mechanism, wherein Hinduja Group submitted a bid of more than 90 bln rupees in 2022.

 

Following multiple litigations in both the National Company Law Appellate Tribunal and the Supreme Court, the National Company Law Appellate Tribunal allowed the committee-of-creditors in March 2023 to continue with the challenge mechanism and call for bids.

 

In the last round of auction conducted for the debt-ridden company, IndusInd International was the sole bidder at 96.50 bln rupees, while Torrent Investments and others did not submit any bids. In June 2023, Reliance Capital's committee of creditors voted with a 99% majority for approval of the resolution plan.  End 

 

Reported by Surya Tripathi

Edited by Aditya Sakorkar

 

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