Reliance Capital begins asset monetisation process

NEW DELHI: Anil Ambani-led Reliance Capital, which recently defaulted on repayments to its debenture holders and other creditors, has begun the process for monetisation of its assets, market sources said. The key assets of Reliance Capital include Reliance Securities, Reliance Health and Reliance General Insurance Company.

Other assets include Reliance Nippon Life Insurance, which is a 51:49 joint venture with Nippon Life, and Reliance Capital’s 49 per cent stake in Reliance Asset Reconstruction Company.

The market sources said Reliance Capital has begun its monetisation plan and expression of interest (EoI) by the trustee — Vistra — will be issued this week.

The resolution applicant can bid for controlling shareholding in Reliance Capital, or individual assets or any combination of assets.

When contacted, a spokesperson of Reliance Capital declined to comment.

Reliance Capital’s debenture holders represent 99 per cent of the company’s total debt of Rs 15,000 crore.

The committee of debentures holders, which is led by EPFO and LIC, has appointed SBI Capital and JM Finance for fast-track resolution and monetisation.

In July, the company had said it has defaulted in repayments to lenders and debenture holders and incurred losses during the June quarter, which indicate that material uncertainty exists that may cast a significant doubt on the company’s ability to continue as a going concern.

“The company is in the process of meeting its obligations by way of time bound monetisation of its assets in cognisance with debenture trustee and debenture holders and accordingly the financial results of the company has been prepared on going concern basis,” it had said.

Reliance Capital has an exposure by way of loans, investments and guarantees in Reliance Commercial Finance and Reliance Home Finance aggregating to Rs 4,954 crore outstanding as on June 30, 2020.

“The lenders of these companies have entered into Inter-Creditor Agreement (ICA) for the resolution of their exposure…on Prudential Framework for Resolution of Stressed Assets. Both the entities are progressing on implementing their resolution plans under ICA, which is valid till September 30, 2020,” it had said.