Mauritius-based Hinduja group firm IndusInd International Holdings (IIHL) has informed the administrator of Reliance Capital that it is ready with its equity contribution of Rs 2,750 crore in cash to acquire the bankrupt firm, but it wants certain conditions to be met in accordance with the resolution plan before transferring the amount.
IIHL has also filed an application with the Mumbai Bench of the National Company Law Tribunal (NCLT), seeking directions for the administrator and the committee of creditors (CoC) to complete all pending activities to close the transaction and not let the lenders invoke the bank guarantees provided by the firm earlier.
The developments came just a day before the July 31 deadline to pay the equity amount.
In a communication to the administrator on Tuesday, IIHL cited the conditions that were still pending action despite being approved by the CoC.
These included the finalisation and appointment of a trustee for carving out assets to be excluded from Reliance Capital, the list of creditors and their distribution break-up as to whom payment has to be made, and the record date for the delisting of equity shares and non-convertible debentures (NCDs) of the firm.
The formalities for reduction of the share capital of Reliance Capital, an agreement for the creation of an escrow account, and the issue of goods and services tax are also pending, said the letter, reviewed by Business Standard.
When contacted, the Hinduja group declined to comment.
In December 2022, IIHL won the race to acquire bankrupt Reliance Capital, a year after it was sent for debt resolution by its lenders after it failed to repay its debt totalling Rs 25,000 crore.
The Mauritius-based investment firm had made an offer of Rs 9,661 crore for the acquisition, but the transaction was delayed as the Torrent group, which had won the auction in the first round, moved the Supreme Court, appealing against a second round of auction.
The matter is currently pending in the Supreme Court.
In February, the NCLT cleared the IIHL resolution plan and later asked it to deposit its equity contribution of Rs 2,750 crore in an escrow account by July 31.
The Hinduja group is raising the rest of the money for the acquisition as debt.
IIHL has told the administrator that its lenders in Mauritius have specifically requested for certain details, without which they will not be able to remit the funds.
The conditions requested by the Mauritius banks include Know-Your-Customer (KYC) details of Vistra (the designated entity of CoC for receiving the funds), a duly executed tripartite escrow agreement signed by all stakeholders, a certified true copy of the resolution authorising Vistra, a certified true copy of the resolution passed by the board of directors of IIHL, and the end use of the funds to be remitted. Once these conditions are met, the funds will be transferred to the escrow account of the lenders, IIHL said.
“By this arrangement, we all can leave the issue of capital infusion aside and focus on the implementation of the plan, which should be our key objective.
"To achieve this, we will have to then jointly inform the NCLT on the various action points which require time beyond August 10,” the IIHL letter said, indicating that the transaction may not close by the deadline.
