The resolution, when fulfilled, will be the first for Anil Ambani Group, parent NBFC Reliance Capital is undergoing insolvency proceedings and received 14 resolution plans earlier this month.
In a meeting held on Monday, the company’s top six lenders agreed to complete the resolution by the end of this month.
“There is no change in the scheme amount, but there has been a significant change from the lenders point of view, as unlike the original scheme, there is no future payment through Non-convertible Debentures (NCDs) and full settlement to the lenders. Getting cash,” said the person.
As per the deal approved by the lenders in June 2021, apart from internal accruals, Autham was to pay ₹500 crore through redeemable NCDs over a period of one to five years. However, it will not be a component of the agreed new plan.
Reliance Commercial owes ₹9,017 crore to creditors. Autumn has offered ₹2,207 crore – a 75% haircut to secured creditors – largely funded by internal cash reserves accumulated in the debtor and also some cash payments by Autumn.
“Autham will have to invest around ₹250 crore on his own as the rest of the money has accumulated” Reliance Commercial from the recovery made in the last three years since the company was under pressure. Lenders hope to complete the process by the end of the month,” said this person.
led by secured creditors Bank Of Baroda (BoB) controls 87% of the debt, much of it in bonds issued by the company. The plan envisages a 20% recovery for unsecured creditors, many of whom voted against or opposed the plan.
Reliance Commercial Finance and its twins Reliance Home Finance are undergoing resolution outside the NCLT in a process that was initiated before the bankruptcy of the parent Reliance Capital.
Over 90% of its loan book consists of inter-corporate loans and loans given to builders which are difficult to recover. Only some loans to small and medium enterprises and some loans to individuals have potential for recovery, according to bankers.
Another person with knowledge of the transaction said, “The nature of the loan book makes recovery difficult. Hence lenders want to get rid of this account as soon as possible by taking whatever is on the table because otherwise, that too. may not be available.” ,
The lenders will now move towards a formal agreement after which approval from the Reserve Bank of India will be required to complete the deal.