Hinduja Group to Acquire Debt-Ridden Reliance Capital

The acquisition process of Anil Ambani’s debt-ridden Reliance Capital is nearing completion. The National Company Law Tribunal (NCLT) has directed IndusInd International Holdings Ltd (IIHL) to finalize the acquisition by February 25, 2025. All major disputes related to the deal, especially concerns raised by lenders like Barclays and 360 One, have been resolved. The only pending approval is for de-listing.

NCLT’s Order for Completion by February 25

During a hearing at the Mumbai NCLT Bench, a division led by Judicial Member VG Bisht and Technical Member Prabhat Kumar instructed IIHL to complete the acquisition by February 25. The next hearing is scheduled for February 27, 2025.

The main challenge in the deal was the fund flow mechanism, which had been approved by 89% of the Committee of Creditors (CoC). However, Barclays and 360 One initially raised concerns about how they would recover their funds if the deal was canceled.

IIHL Confirms Dispute Resolution

During the hearing, IIHL’s lawyer, Abhishek Manu Singhvi, informed the tribunal that all issues had been resolved. The acquisition process is on track, and only the de-listing approval is awaited. If the acquisition is not completed by February 25, the tribunal will review the matter on February 27.

Earlier, in February 2024, NCLT approved IIHL’s ₹9,861 crore acquisition proposal. Initially, IIHL had informed the Committee of Creditors (CoC) that it aimed to complete the deal by January 31, 2025.

Dispute Over ‘Unwinding Clause’

Barclays and 360 One had provided ₹4,300 crore as a second installment of financial assistance for the deal. They had demanded an ‘Unwinding Clause’, which would have allowed the deal to be canceled if any issues arose. However, the Administrator’s lawyer argued that under previous NCLAT rulings, once a Resolution Plan is approved, it cannot be withdrawn. Now, Barclays and 360 One have agreed to remove this condition, clearing the path for the acquisition.

Funding and Payment Status

IIHL’s lawyer, Abhishek Manu Singhvi, outlined eight key points regarding the funding and payment process. In August 2024, IIHL had already deposited ₹2,750 crore and kept an additional ₹3,000 crore in an Escrow Account, covering 58.93% of the total amount. The remaining ₹4,300 crore is also ready, but the fund flow mechanism needed to be implemented, which has now been resolved.

With all major obstacles cleared, the acquisition of Reliance Capital by the Hinduja Group’s IIHL is expected to be completed by the end of this month.

Stay tuned to BETULHUB for the latest updates on this major corporate deal!