The National Company Law Tribunal has approved the £965 million resolution plan submitted by Hinduja’s IndusInd International Holdings (promoter of IndusInd Bank) for bankrupt Reliance Capital.
IIHL will bring in upfront £965 million in cash within 90 days of approval of the resolution plan. This will give the company control of Reliance Capital, which has functioning subsidiaries in life and general insurance, as well as entities in securities broking and wealth management.
Of the £965 million IndusInd Holdings will bring, secured financial creditors who voted in favour of the resolution plan will receive £924.7 million - 43% of their admitted claims of £2.21 billion.
Of the remaining amount, unsecured financial creditors will receive around 4% of their claims, while operational creditors will receive nearly 4.4% of their claims. Most of Reliance Capital’s creditors are investors in the company’s bonds. They include LIC and EPFO.
The Hindujas will have to file an application with Irdai for a change in ownership of Reliance General Insurance and Reliance Nippon Life Insurance. They have already applied for a change in ownership of Reliance Securities, Reliance Wealth Management, and Reliance Capital.
Two registered valuers placed Reliance Capital’s average liquidation value at £1.31 billion and the average fair value of the corporate debtor at £1.66 billion after lender to Reliance Capital initiated the corporate insolvency resolution process in Dec 2021.