Lenders of Reliance Capital Ltd. have warned Hinduja Group arm IndusInd International Holdings Ltd. after it failed to meet the conditions set by the National Company Law Tribunal. The tribunal had imposed requirements, including depositing Rs 250 crore in an escrow account, which IIHL missed by the July 31 deadline.
The NCLT extended the deadline to Aug.10 for IIHL, the successful bidder for Reliance Capital, under specific conditions. These included depositing Rs 2,500 crore in an offshore escrow account for the Committee of Creditors by the end of July. Additionally, IIHL was required to submit executed term sheets for a Rs 7,300 crore loan to the Monitoring Committee.
As of Aug. 1, Vistra ITCL, representing the CoC, notified IIHL of its default on the NCLT’s order and reserved the right to pursue legal and equity remedies based on the resolution plan. The CoC has emphasised that no delays or actions by them should be interpreted as a waiver of these rights unless explicitly stated.
IIHL was granted an extension after missing a previous deadline on May 27. The firm attributed the delay to pending regulatory approvals and compliance issues. The NCLT had approved IIHL’s Rs 9,650-crore resolution plan for Reliance Capital on Feb. 27, 2024.
Reliance Capital, which had accumulated over Rs 40,000 crore in debt, saw its board superseded by the Reserve Bank of India in November 2021, due to governance and payment default issues. Nageswara Rao Y was appointed as the administrator and initiated a bidding process in February 2022, leading to the current resolution efforts.
(With inputs from PTI).
