Money & Banking

Banks seek bids for resolution of two companies of Anil Ambani

Surabhi Mumbai | Updated on August 05, 2020 Published on August 05, 2020

Resolution process kickstarts for Reliance Commercial Finance and Reliance Home Finance

Lenders to Reliance Commercial Finance Ltd (RCFL) and Reliance Home Finance Ltd (RHFL) are proceeding with the resolution plan and have sought bids for the two companies.

“Certain lenders of RCFL, being scheduled commercial banks, all-India term financial institutions, and non-banking financial institutions, led by Bank of Baroda (collectively, the “lenders”) are desirous of seeking resolution plans from eligible bidders having adequate technical and financial capability,” said the notice on Bank of Baroda’s website.

Deloitte Touche Tohmatsu has been appointed by the lenders as Process Advisors for the Resolution Process of RCFL, which has now been re-branded as Reliance Money.

The book has been categorised into retail and SME, corporate and group and there are three options being considered for resolution.

Under the first option, bids would be for acquiring the entire shareholding and business of RCFL as a going concern, on an as-is-where-is and as-is-what is basis. The second option would be to acquire one or two asset books, which would be retained in the company, while the balance asset portfolio books will be carved out to separate entities. The third option would be for acquisition of one or more asset books.

The last date for submission of bids is August 11.

Reliance Home Finance

The lenders have also issued a similar notice for RHFL. BoB Capital Markets and Ernst & Young have been jointly appointed as the Process Advisors.

In the case of RHFL, the lenders have decided to categorise the book into retail and wholesale book.

Bidders can submit EOIs and bids for the acquisition of entire shareholding and business of RHFL. Alternatively, they can look at acquiring the full retail book, which will be retained in RHFL, while the wholesale book will be carved into a separate entity. The third option would be for only the retail bid.

The last date for submission of bids is August 31.

RCFL and RHFL are both subsidiaries of Reliance Capital.

RCFL offers small and medium enterprises loans, loans against property, infrastructure financing, agriculture loans, supply chain financing, micro financing, vehicle loans and construction finance while RHFL is engaged in home finance.

RHFL reported a net loss of ₹161.34 crore for the first quarter of the fiscal. Reliance Capital reported a standalone loss of ₹387 crore in the same period.

In its results, Reliance Capital said it has exposure by way of loans, investments and guarantees in RCFL and RHFL totalling ₹4,954 crore outstanding as on June 30, 2020.

“The lenders of these companies have entered into Inter-Creditor Agreement (ICA) for the resolution of their exposure... Both the entities are progressing on implementing their resolution plans under ICA, which is valid till September 30, 2020,” it said.

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Published on August 05, 2020
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