The Committee of Creditors (CoC) of Reliance Capital (RCap) has filed a fresh application before the Delhi bench of the National Company Law Appellate Tribunal (NCLAT) seeking the forfeiture of Rs 2,750 crore from IndusInd International Holdings (IIHL) in case of a default by the Hinduja Group-owned company.
The move follows a recent order by the National Company Law Tribunal (NCLT) on 23rd July, which permitted IIHL to take over the insolvent Reliance Capital for a total of Rs 9,861 crore. However, disagreements have since arisen between the lenders and the Hinduja Group regarding the implementation of this resolution plan.
According to reports, CoC's plea seeks payment of interest on the debt component of Rs 7,300 crore from IIHL, starting from August 2023 until the actual date of payment. This request aims to protect the lenders' interests and mitigate potential financial losses due to delays in the implementation of the resolution plan.
Under the terms of the approved plan, IIHL was required to deposit an initial equity amount of Rs 250 crore into a domestic escrow account and Rs 2,500 crore into an offshore escrow account of the CoC by 31st July. However, as the deadline approached, IIHL filed an interlocutory application before the NCLT, requesting modifications to the tribunal’s order. The administrator of Reliance Capital has opposed any relief being granted to IIHL.
In response to IIHL's request, the NCLT partially granted an extension until 10th August for the implementation of the resolution plan. Despite this extension, the CoC's move to seek forfeiture of funds reflects their concern over potential delays and their intent to secure the interests of the lenders.
Experts believe the appeal to NCLAT is a strategic move to safeguard the creditors from further losses due to IIHL's delayed compliance with the NCLT-approved resolution plan. The outcome of this appeal will be crucial in determining the future of Reliance Capital's resolution process and the protection of lender interests.