Reliance Capital’s lenders’ legal advisors ask Hinduja Group to submit resolution plan before March 31, says report

The legal advisors representing the lenders to Reliance Capital have formally communicated with Hinduja Group, insisting on the prompt implementation of the resolution plan before March 31, 2024, the Economic Times reported citing sources.

Despite the bankruptcy court allowing a 90-day window for the winning bidder, IndusInd International Holdings (IIHL), the legal counsel from Luthra and Luthra Law Offices stressed the importance of adhering to the specified timeline.

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IIHL did not respond to queries, the report said.

Approval and Contestation

The National Company Law Tribunal (NCLT) approved the ₹9,650 crore resolution plan proposed by IIHL on February 27. Torrent Investments, the alternate bidder, has contested the resolution process, leading to ongoing proceedings in the Supreme Court. The NCLT order highlighted that the implementation timeline hinges on meeting the conditions precedent.

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In a letter dated March 4, the legal counsel informed IIHL of pending documents and information related to regulatory approval from the Insurance Regulatory and Development Authority of India (IRDAI), the report said. The letter urged IIHL to furnish the necessary information to facilitate the approval process, it added.

IIHL had previously committed to executing the plan before March 31. Lenders, eager to showcase improved recovery for the fourth quarter, emphasised the significance of timely implementation. A partner from one of the Big Four firms told the paper that, typically, the winning bidder aligns their payment with the stipulated timeline in the plan.

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The winning bidder is expected to make payments only after securing regulatory and legal clearances. As of June 8, 2023, the administrator has acknowledged claims totalling ₹25,345 crore from lenders. With a cash balance of ₹400 crore, the anticipated recovery for lenders stands at approximately ₹10,000 crore, representing a 40 percent recovery rate.