IIHL's Rs 5,600 crore payment paves way for Reliance Capital acquisition

IndusInd International Holdings (IIHL), the Mauritius-based holding company, paid ₹5,600 crore to lenders on Monday for the acquisition of Reliance Capital (RCap). The Move sets the stage for the completion of the deal by Thursday, according to Ashok Hinduja, IIHL chairman.

 

The payment comes ahead of a scheduled hearing on March 12 at the National Company Law Tribunal (NCLT) in Mumbai.

 

In an earlier hearing, the NCLT instructed lenders and the monitoring committee to resolve procedural formalities by March 12 to facilitate the ownership transfer.

 

“IndusInd Bank will only act as a distributor for Reliance Capital insurance products, and all commercial terms between the bank and RCap will be based on an arm’s length basis,” Hinduja said.

 

IIHL also injected ₹2,750 crore into RCap as equity funding for the transaction.

 

After RCap went bankrupt, IIHL made the winning bid to acquire the company with an offer of ₹9,650 crore.

 

An email sent to IIHL did not elicit any response.

 

With the acquisition of RCap, IIHL will gain access to two insurance joint ventures and plans to sell insurance products via IndusInd Bank branches.

 

IIHL’s total acquisition cost for RCap amounts to ₹9,861 crore, funded through ₹7,300 crore in debt raised from Barclays and 360 One, alongside ₹2,750 crore in equity. The firm has also injected an additional ₹200 crore into Reliance General Insurance as capital.

 

In November 2021, the Reserve Bank of India (RBI) superseded the RCap board following a loan default and appointed an administrator to seek bids for the company.