Lenders to Reliance Capital, promoted by Anil Ambani, have set stringent conditions for granting a 90-day extension to the winning bidder, a Hinduja Group entity. They demand the immediate deposit of Rs 2,750 crore into an escrow account and payment of 12 per cent interest on the Rs 9,660-crore offer.
This development comes ahead of a crucial hearing by the National Company Law Tribunal (NCLT) on Tuesday, where IndusInd International Holdings (IIHL), part of the Hinduja Group, will plead for the extension.
The NCLT had initially mandated IIHL to implement the acquisition plan by 27 May. However, IIHL's reapplication for 13 regulatory approvals, prompted by changes in the implementation structure, has led to the extension request.
The lenders' affidavit reveals that the Reserve Bank of India (RBI) expressed concerns about approving a structure where Reliance Capital would guarantee the borrowing of Hinduja-promoted Aasia Enterprises to finance the acquisition. Aasia's plan to raise funds through bonds with a put option structure, allowing bondholders an early exit, faces regulatory uncertainties.
Lenders have stressed the unpredictability of obtaining the necessary regulatory approvals and the conditions that might be imposed. They argued that granting an extension under current circumstances would be tantamount to default.
During a committee of creditors (CoC) meeting, the lenders proposed allowing the extension only if IIHL places Rs 2,750 crore in equity into an escrow account.
Additionally, they suggested a waiver of the extension condition if IIHL agrees to pay 12 per cent interest on the Rs 9,661 crore offer between 27 May and 30 June. However, IIHL rejected both demands during a management committee meeting on 23 May.
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