LI Network
Published on: November 19, 2023 at 18:10 IST
The Reserve Bank of India (RBI) has given the green light to the resolution plan for the financially troubled Reliance Capital.
This approval opens the door for IndusInd International Holdings Ltd (IIHL), a firm within the Hinduja Group, to acquire Reliance Capital.
The announcement was made in a regulatory filing by Reliance Capital, stating that the Administrator of the company had received a “No objection” letter from the RBI on November 17, 2023.
IndusInd International Holdings Ltd emerged as the top bidder in the second round of auctions held in April, offering Rs 9,650 crore to take over the debt-ridden Reliance Capital.
The RBI had intervened on November 29, 2021, by superseding the board of Reliance Capital due to payment defaults and governance issues. Nageswara Rao Y was appointed as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the company.
Reliance Capital becomes the third major non-banking financial company (NBFC) to undergo bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC), following Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
The RBI, subsequently, filed an application for the initiation of CIRP against Reliance Capital at the Mumbai bench of the National Company Law Tribunal.
In February of the previous year, the RBI-appointed administrator had invited expressions of interest for the sale of Reliance Capital.
The resolution plan approval by the RBI now marks a significant step towards resolving the financial challenges faced by Reliance Capital, allowing IndusInd International Holdings Ltd to proceed with the acquisition.