Comments
Aditya Birla Sun Life Insurance has written to Reliance Capital’s administrator and CoC (committee of creditors), threatening regulatory intervention in the due diligence process for submitting final bids for Reliance Nippon Life Insurance.
The life insurer claimed that there are delays or insufficiencies in the data requested to complete due diligence, as per the November 16 letter accessed by businessline.
“If the lack of critical information relating to RCap’s assets continues, without any intervention by yourself, we may be constrained to seek the intervention of relevant regulators and authorities to address these issues and to ensure that the resolution process of RCap and its assets is conducted in a manner so as to ensure value maximisation,” the letter said.
Race against deadline
Saying that it is “very keen to participate in the resolution process of RCap”, Aditya Birla Sun Life Insurance added that the pendency of critical information, however, is making it difficult to complete the evaluation in time. For this, it had also sought a management meeting but has received no response as yet.
The insurer said that if the information or management meeting is arranged too close to the submission deadline of November 28, it may not be able to seek necessary approvals to submit its financial proposal, or only be able to submit a sub-optimal proposal.
Given that the deadline is unlikely to be extended this time around, Aditya Birla Sun Life’s queries and requests for information have already started being expedited, an industry source told businessline.
Nippon Life’s shareholding
Reliance Capital’s JV partner, Japan-based Nippon Life Insurance, has also written to the administrator highlighting its commitment to the Indian life insurance market, and expressing its displeasure regarding any dilution in its stake post the insolvency process.
“We wish to build a partnership only with a bidder who is willing to respect the current status of RNLI and the provisions of the existing shareholders’ agreement with RCap,” the letter said, adding that this structure is very to secure its life insurance business in India.
“It is not our option to cause RNLI to merge with another life insurance company, or to withdraw from the life insurance business in India as a consequence of the ongoing CIRP of RCap,” it said.
Aditya Birla Sun Life Insurance is a 51:49 joint venture between the Aditya Birla Group and Canada’s Sun Life Financial Inc. If Aditya Birla Capital’s bid is approved, Reliance Nippon Life Insurance will need to be merged with Aditya Birla Sun Life Insurance as per regulatory guidelines.
Nippon Life said that it has already communicated its position to Aditya Birla Capital and Sun Life Financial, and is hopeful that they will make a “reasonable decision based upon their understanding”.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.