The sale of Reliance Capital’s (RCap’s) assets by Indian banks received a massive response with eight companies – including Oaktree, JC Flowers and six Asset Reconstruction Companies (ARCs) – submitting EoIs (expressions of interest) for the whole company.
Blackstone, KKR and Bain Capital, among others, are in the race for its general insurance arm, and Bandhan Bank, Bain and Dabur Investments have expressed interest in RCap’s 51% stake in the life insurance industry. .
In total, the lenders’ advisers – SBI Capital Markets and JM Financial – have received over 60 different offers for the assets. Companies that have expressed an interest will now have access to the company’s data room and will then be invited to submit their financial offers for the company or its assets.
Interestingly, in the current DHFL sale, 24 companies had submitted EoIs but only four ultimately submitted financial offers.
A source said 18 bidders – including ChrysCapital, JC Flower, Blackstone, KKR, CVC Capital Partners and Bain Capital – had submitted EoIs for Reliance General Insurance, which is 100% owned by RCap.
For Reliance Nippon Life Insurance, in which RCap owns 51% of the capital, lenders received 16 offers, including from Bain Capital, NIIF, Arpwood Partners, Dabur Investments, Bandhan Bank and Multiples Asset Management.
A source close to the development said eight bidders had submitted EoIs for Reliance Securities, including Bain Capital, Religare Broking, Edelweiss Securities and a few ARCs.
For Reliance ARC, there are six bidders, including Bain Capital and International Asset Reconstruction Company. Eight bidders have expressed interest in Reliance Health, including Blackstone, Bain Capital, Arpwood Partners and a few ARCs. There are also several bidders for RCap’s participation in ICEX and Paytm.
The monetization of RCap’s assets was initiated by the Debentureholder Committee and Debenture Trustee Vistra ITCL India, which represents 93 percent of the Company’s total outstanding debt.
Advisors began the process to unlock value on October 31, and it ended on Tuesday. RCap had a consolidated debt of Rs 26,869 crore, and the stand-alone entity had a debt of Rs 17,446 crore as of September 2020.
RCap isn’t the only one going through debt resolution. In March, CARE Ratings placed Rs 11,726 crore from the subsidiary of the company Reliance Home Finance in the default category. RHFL had said its lenders had entered into a creditor-to-credit agreement to achieve the debt resolution plan. But the process was delayed due to a dispute in Delhi High Court. RHFL has cash of Rs 1,000 crore on its books, the company informed the stock exchanges on November 28th.
A separate debt resolution is currently underway for Reliance Commercial Finance (RCF), the NBFC arm of the company. As of March 31, RCF had assets under management (including a securitized portfolio) of Rs 11,190 crore against Rs 14,269 crore as of March 31, 2019.