US private equity major Oaktree Capital, Hinduja Group and Ahmedabad-based Torrent - a consortium of Piramal and Cosmea Financial - have submitted their resolution plans for debt laden Reliance Capital (RCap).
“The option 1 bidders are Hinduja, Torrent, Oaktree, Cosmea Financial and Piramal consortium, and UV ARC (asset reconstruction company) Ltd, who have submitted their resolution plans for Reliance Capital as a company,” said a person aware of the development.
Piramal Enterprises Ltd has submitted a bid for Reliance General Insurance Company and Reliance Health Insurance under the corporate insolvency resolution process of RCap, along with a separate bid by Cosmea’s for RCap, on a several basis under limited liability terms, another person confirmed.
Out of these five bidders, UV ARC has bid on a fee basis, which means that it has not submitted any resolution plan for RCap. It will further sell Rcap assets and make payments to lenders, as and when the sale happens, the person added.
The deadline for submitting bids closed on Monday.
Meanwhile, Zurich Insurance and US-based private equity investor Advent International, which had earlier submitted non-binding bids for Reliance General Insurance Company (RGIC) in the initial round, have stayed away in this final round. No separate bids were made for Reliance General Insurance Company and Reliance Nippon Life Insurance Company (Reliance Nippon Life).
Advent had submitted a non-binding bid of Rs 7,000 crore for RGIC during the first round of the bidding. Other two players had placed 50% lower bids with Piramal quoting about Rs 3,600 crore, while Zurich’s offer stood at Rs 3,700 crore.
Moreover, both Aditya Birla Sun Life Insurance and Nippon Life Insurance of Japan, who were fighting for RCap's 51% stake in the life insurance business, have also not submitted any bid for Reliance Nippon Life.
Nippon Life Japan has also not submitted a bid to increase its stake in the firm from 49% to 74%, as earlier planned.
In the absence of separate bids for RGIC and Reliance Nippon Life, the Committee of Creditors (COC) design to stitch an Option -1 plan by combining the different bids of RCap clusters fails, the person quoted above said.
The RCap lenders had given two options to the bidders. Under option 1, bidders were to bid for Reliance Capital as a company, and under option 2, multiple businesses of RCap including General Insurance, Life Insurance, Commercial Finance, Home Finance, Securities business, Reliance ARC and others were divided into eight different clusters.
The objective of the cluster bidding was to first get separate bids for RGIC and Reliance Nippon Life, which account for over 90% of the total RCap value and then stitch them together to make the option 1 bidders compete against them.
On 2 November, the RCap bidders had sought settlement of the Anil Ambani group company’s multiple legal issues totalling Rs 20,000 crore before the completion of the resolution plan. The bidders – including a consortium led by Piramal Enterprises, Hinduja Group and Zurich Insurance – took both the lenders and the administrator to the bankruptcy process, seeking to address the issue “immediately”.
Last year in December, Reliance Capital, the financial services holding company of Anil Ambani-promoted Reliance Group, became the fourth financial services firm to be admitted for insolvency by a Mumbai bench of the National Company Law Tribunal (NCLT). Previously, Dewan Housing Finance Corporation Ltd (DHFL) in November 2019 and in October, two Srei Group firms were taken up for insolvency process.
Earlier this year, several large private investors including the likes of Brookfield, Ares SSG Capital, Edelweiss, Blackstone’s asset reconstruction arm, Multiples private equity, JC Flowers and Co, True North and TPG were among the 55 prospective resolution applications (PRAs) to have submitted expressions of interest (EOIs) to acquire RCap and its assets.
Reliance Capital has over Rs 90,000 crore worth of assets under management (AUM) with more than one crore customers and 18,000 workforce.
The deadline to complete the entire process ends on 31 January.
