Hinduja’s IIHL says ready with ₹2,750 cr, seeks modification of order

Hinduja Group-owned IndusInd International Holdings Ltd (IIHL) on Tuesday said in an application that it is ready with the ₹2,750-crore initial fund to take over Reliance Capital and asked the National Company Law Tribunal (NCLT) for an extension of the deadline to comply with the tribunal’s order related to the acquisition. A copy of the petition has been seen by Mint.

On 23 July, the NCLT in its order had allowed IIHL time till 10 August to implement its resolution plan for Reliance Capital while also directing the firm to deposit ₹2,750 crore (equity component) in an escrow account by 31 July. In essence, IIHL has sought modification of the tribunal’s order.

It petitioned before the tribunal that if the NCLT does not consider the modification of its order then the Administrator, the CoC and IIHL will jointly face ‘hardship’ and ‘unexplainable challenges’ in implementing the Resolution Plan for the Reliance Capital.

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On Tuesday, a petition showed IIHL has stated that it is ready with the capital infusion amount of ₹2,750 crore ( ₹2,500 cr + ₹250 cr equity component). It, however, said “The escrow account formalities are required to be completed before the funds can be disbursed or credited,” a separate letter to the Administrator, Nageswara Rao Y, showed.

Additionally, IIHL mentioned that for the purpose of remittances of the said funds, the banks in Mauritius have specifically requested for certain details without which they will not be able to process the said funds.

The details sought by the Mauritius Bank include—the KYC details of Vistra, a designated entity of the Committee of Creditors, a duly executed triparte escrow agreement by all stakeholders, a copy of the resolution passed by IIHL’s Board of Directors and the end use of funds to be remitted.

According to the petition, IIHL pointed out that if the modifications/ changes are not considered by the NCLT and are not permitted to be allowed, it would rather be difficult for the Administrator, the Committee of Creditors and the Applicant to satisfactorily implement and comply with the conditions contained therein strictly within the timelines set out in the said order.

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Adding that “the Administrator as well as the Committee of Creditors are required to carry out jointly to smoothly and effectively implement the resolution plan.” 

Pertinently, IIHL has asked the Administrator and CoC to implement certain requirements that were part of the resolution plan and were approved by the CoC itself which are pending actions as on date.

These include, finalization and appointment of the Trustee for carving out the assets that are excluded from Reliance Capital, list of the creditors and their distribution break up as to whom payment has to be made, and record date for delisting of equity shares and non-convertible debentures (NCDs) of Reliance Capital. Further, there should also be application for delisting of equity shares and NCDs of Reliance Capital, formalities for reduction of the share capital of Reliance Capital, Escrow Agreement for creation of an Escrow Account, outstanding issue of GST, etc. Such requirements are time consuming and cannot be fulfilled by 10 August, IIHL’s 30-page petition showed.

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