Hinduja Group plans to delist Reliance Capital from bourses, extinguish existing shares

MUMBAI - Following the National Company Law Tribunal approval for the debt resolution plan of the Hinduja Group for cash-strapped Reliance Capital, the new owner is planning to delist the stock from stock exchanges by extinguishing the shares.

“The liquidation value of the shareholder of RCL (Reliance Capital) is zero and therefore the shareholders will not be entitled to receive any payment and no offer will be made to any shareholder of RCL,” the exchange document said.

The Tuesday, the tribunal approved Hinduja group firm IndusInd International Holdings (IIHL)'s bid to acquire Reliance Capital under a debt resolution process. The buyer has been given 90 days to implement the resolution, subject to regulatory and other approvals.

It is proposed to cancel and extinguish the entire existing share capital of Reliance Capital without any consideration by the consent order issued by the court, with IIHL and/or the implementing entity and its representatives being the sole shareholders of the corporate debtor, Reliance Capital. saying.

IIHL’s submitted proposal includes an upfront cash payment of Rs 9,650 crore, accounting for 37.03% of the initial amount claimed. The company has also proposed a net amount of Rs 50 crore for the benefit of the lenders, which will be part of the initial cash and an additional Rs 11 lakh crore in addition to the proposed amount.

The proposed acquisition is yet to receive approval from RBI, IRDAI, CCI, and market regulator SEBI.

According to reports, approvals from both RBI and SEBI are likely to come in by next week.

The deal is also subject to the sale of Reliance Home Finance shares held by Reliance Capital in the open market on various dates.

The Hinduja Group's application was approved by the creditors' committee in July last year. However, approval from the tribunal got delayed due to discussions around the distribution of funds between financial and operational creditors.

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