Money & Banking

Reliance Home Fin resolution: BoB files application for vacation of restraint order

Our Bureau. Mumbai | Updated on March 04, 2021

Hoping to ensure timely resolution of Reliance Home Finance, Bank of Baroda filed an application in the Delhi High Court, seeking vacation of the restraint order obtained by Shapoorji Pallonji Group entity.

Case adjourned

The case was posted for hearing before the Delhi High Court on Thursday, and has now been adjourned to March 10.

“...it is pertinent to note that a resolution plan is being worked out as per the terms of the extant RBI Guidelines, and approximately 95 per cent of the lenders of Respondent No 1 have agreed to consider the resolution plan which has been submitted,” the application said.

Lead banker

Bank of Baroda is the lead banker under the ICA for the resolution of debt-ridden Reliance Home Finance.

The application noted that a condition precedent stipulated in all the resolution plans is the vacation of the stay imposed by the High Court. As reported by BusinessLine earlier, the debt resolution of RHFL is at the final stage, with four bidders vying for its assets.

Lenders are hoping to finalise the successful bidder for RHFL’s assets in the next couple of weeks.

However, the stay order from the Delhi High Court against RHFL in November 2019, is posing a challenge as the company is prohibited from disposing, alienating and encumbering, either directly or indirectly or otherwise part with the possession of any of its assets. An SP Group joint venture is a secured lender with about ₹200 crore of exposure to RHFL.

The application said the ICA lenders had reached out to the petitioner, which is the SP Group joint venture, but it did not respond to them.

The ICA lenders, which largely include public sector banks, have a pari passu charge over RHFL’s assets, and are owed ₹7,109.09 crore as on July 3, 2019, while the SP Group joint venture has a claim of about ₹217.92 crore.

RHFL’s total financial indebtedness, including short-term and long-term debt amounted to ₹13,047.59 crore, according to a regulatory filing on February 26. The total amount of outstanding borrowings from banks and financial institutions was ₹4,329.32 crore.

Published on March 04, 2021

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