Reliance Capital lenders set out conditions to grant extension to Hindujas

Lenders to Anil Ambani-promoted Reliance Capital have filed an affidavit with the bankruptcy court stating that the winning bidder - a Hinduja Group entity - can be granted a 90-day extension only if it deposits Rs 2,750 crore in a lender's escrow account and pays 12% interest on the Rs 9,660-crore offer.

The National Company Law Tribunal is due to hear the Hinduja plea seeking a 90-day extension on Tuesday. NCLT directed Hinduja Group's IndusInd International Holdings (IIHL) to implement the plan by May 27. However, it has reapplied for 13 approvals to various regulatory authorities after it changed the implementation structure and has thus sought fresh approvals.

Lenders, in the affidavit, pointed out that the Reserve Bank of India (RBI) had communicated to the Hinduja Group that it would not approve a structure wherein Reliance Capital would guarantee the borrowing of Hinduja-promoted Aasia Enterprises for acquiring Reliance Capital.


Aasia is borrowing the money to finance the acquisition of Reliance Capital in the form of bonds with a put option structure, which would give bondholders the right to exit at a predetermined date. Lenders have expressed apprehension that RBI may not approve this structure.

"There is no certainty whether regulators will grant such approvals and conditions attached thereto not the timeline for grant of such approval," the affidavit stated.

Hinduja Group did not respond to ET's request for comments.

Lenders said an extension would be tantamount to default. At a committee of creditors (CoC) meeting, they discussed the possibility of giving an extension only if IIHL placed an equity amount of ₹2,750 crore in escrow with them.

They also proposed that a waiver could be granted if IIHL pays 12% interest on the ₹9,661 crore (the CoC-approved offer) between May 27 (when the plan was supposed to be implemented) and June 30.

However, at a management committee meeting on May 23, IIHL rejected both the demands of interest payment and parking equity.