Lenders had selected the preferred bidder about six months ago, but the debt resolution for the two subsidiaries still hangs as the Securities and Exchange Board of India (Securities and Exchange Board of India) ties up.Self) Rules state that 100% of debenture holders have to approve the resolution plan for a company, unlike a trust deed signed by investors, which is expected to have only 75% of the vote.
“It’s a very peculiar situation because both the lending subsidiaries, which make the majority of loans to creditors in financial services. Anil Ambani The group has found a buyer before the NCLT (National Company Law Tribunal) process begins. But it has been stuck due to a regulatory conflict. The matter is in court and we have been waiting for a solution for months.”
In June, Autumn Investment and Infrastructure was declared the preferred bidder by the lenders to take on RHFL, with 91 per cent of the creditors voting in favour. Autumn offered ₹1,724 crore in cash and another ₹300 crore by way of 8% non-convertible debentures, payable within a year to the company, on which the creditors in the deal done by BoB Capital Markets owe ₹11,200 crore. was due.
However, 41% of the debt is held by bond holders who have not yet voted on the scheme. IDBI Trusteeship, the chief trustee for bond holders, has not voted as it awaits clarity on the SEBI rule, which was amended in September 2020, allowing 100% of the debenture holders’ vote for the resolution plan became mandatory.
“The scheme has so far been approved by only those lenders who have signed the intercreditor agreement. Debenture holders are yet to approve it as SEBI regulated trustees are going by its interpretation. However the trust deed states that 75% The votes are enough, the trustees have not agreed so far,” said a second person.
The situation is more complicated in RCFL, which owes more than Rs 9,000 crore to creditors. In July, Autham was again selected as the preferred bidder to take over the company with an offer of ₹1,240 crore, which meant an 86% write-off for creditors.
On 28 October, the Bombay High Court, responding to a petition by lenders, directed Vistara ITCL, trustee of bond holders in RCFL, to convene a meeting of bond holders within 30 days to vote on a resolution plan, including Vistara’s disputes. was rejected. As per SEBI regulations. Bond holders have more than 90% debt in RCFL. Most of the bonds are held by banks and financial institutions.
Based on the order, Vistara convened a meeting of bond holders on 8 December. However, this week SEBI filed a caveat against the order, the hearing of which is next Monday.
“This is proving to be a tussle between the regulators. reserve Bank of India It wants the lenders to follow the procedure, while SEBI wants the trustees to follow the rules laid down by it. “One of them will have to step back to resolve the issue as the resolution will take a back seat,” said a senior official of a debenture trustee.
The RBI’s move to send Reliance Capital to the NCLT earlier this week has complicated the situation. Lenders expect the central bank not to direct a consolidated resolution of all the three financial services companies, which would mean all the work done so far to find buyers for RCFL and RHFL will go down the drain.
“Either SEBI allows voting or RBI consolidates all debt. Otherwise, this stalemate will continue. One can only hope that a solution will be found soon as it is unnecessary delay for a process which was earlier It’s already too late,” he said. Trustee Officer.