New Delhi: The Hinduja family has sounded out global credit funds to raise up to $1 billion (about ₹8,200 crore) to finance the potential acquisition of Reliance Capital for which it is the favored bidder after lenders to the insolvent financial services company approved Hinduja’s resolution plan, sources familiar with the matter told ET.
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Farallon Capital, Oaktree, Ares Asia and Cerberus are among the funds that have been tapped in recent weeks to discuss the modalities of the proposed arrangement if the Hindujas were to get requisite court approvals for their bid, sources said.
The financing could be backed by shares of Reliance Capital’s life and general insurance arms, and the credit funds are likely to seek assurances from the Hinduja Group that such an arrangement will have the consent of the insurance regulator.
Timeline Could Vary from 3-6 Mths
However, timeline for closing such a financing could vary from 3-6 months depending on how quickly legal hurdles toward completing the acquisition are crossed. The final list of financiers could also change.
Reliance Capital’s lenders have approved a Rs 9,650-crore resolution plan made under the insolvency and bankruptcy code (IBC) rules from Hinduja Group company IndusInd International Holdings Limited (IIHL), the Hinduja Group announced on July 3. Its offer could result in a successful debt resolution for the debt-laden Reliance Capital, which will be only the second large financial services company after Dewan Housing Finance (DHFL) to be sold under provisions of the IBC.
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Kolkata-based Srei is the third financial services group admitted for insolvency resolution, but there are no final bids yet for two distressed infrastructure financiers of the group.
NCLT Approval
The plan will be taken to the National Company Law Tribunal (NCLT) for approval this week as a next step.
Hinduja Group did not respond to ET’s queries until the publication of this report. Oaktree and Ares Asia declined to comment. Cerberus and Farallon Capital did not respond to requests for comment.
The Hinduja family owns a bulk of its 15% stake in IndusInd Bank through Mauritius-based IIHL, which is the holding company for the group’s interests in the financial services space. The company is also in talks with international banks to part-finance the Reliance Capital acquisition, the sources cited earlier said. In its July 3 communication, IIHL said its board had approved fund-raising of $1.5 billion to help increase its stake in IndusInd Bank to up to 26% and also to finance the bid for Reliance Capital.
“In Dubai for the shareholders’ meet to discuss and decide on fund-raising options to bridge demand-supply (of $2.5 billion),” IIHL’s president and chief executive officer Moses Harding John tweeted on July 4.
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The RBI had superseded the board of Anil Ambani-owned Reliance Capital on November 30, 2021 citing governance concerns. It brought in Nageswara Rao Y, a former executive director at Bank of Maharashtra, as the company’s administrator.
The company was subsequently admitted for insolvency proceedings.
Financial creditors of the company have filed claims worth Rs 24,000 crore for recovery of their dues. This does not include the dues of Reliance Home Finance and Reliance Commercial Finance, which are both units of Reliance Capital.
