Reliance Capital lenders’ counsel asks Hindujas to roll out IBC plan

The legal advisor of the lenders to Trusted capital has written to the Hinduja Group requesting them to implement the resolution plan before the end of this month, even when bankruptcy court has given the winning bidder 90 days, said people with knowledge of the matter.

In a letter dated March 4, Luthra and Luthra Law Offices asked IndusInd International Holdings (IIHL) to ensure that "in accordance with its own commitment, the resolution plan is implemented on or before March 31, 2024."

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The IIHL did not respond to ET's request for comment.

He National Company Law Tribunal (NCLT) approved IIHL's Rs 9,650 crore resolution plan in its order dated February 27. Torrent Investments, which was the other bidder in the fray, challenged the resolution process and the matter is pending before the Supreme Court.

However, the NCLT order said, "Since the implementation of the resolution plan is subject to compliance with the conditions precedent (CP), the period of 90 days from the date of approval by the NCLT shall be automatically extended by the number of days that are required for the satisfaction of the CP."

In the letter to the IIHR, the legal advisor stated that "certain documents and information in relation to regulatory approval (IRDAI) remain pending at the end of the IIHL." The letter further requested the IIHL to provide information for obtaining relevant regulatory approvals. The letter stated that the IIHL had committed in December and confirmed that it would implement the plan by March 31. "Lenders are keen for the plan to be implemented before the end of the month so that they can show a better recovery for the fourth quarter. However, in almost all cases, the successful bidder makes the payment within the time frame provided in the plan," said a partner at one of the big four companies.

The winner would make payments only after receiving regulatory and legal authorizations, the same partner stated. The administrator admitted Rs 25,345 crore in claims from lenders as on June 8, 2023. The company has a cash balance of Rs 400 crore, so the recovery to lenders is likely to be around Rs 10,000 crore , which is equivalent to a 40% recovery.

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