Lenders begin vote to select highest bidder for Reliance Commercial Finance

Even as the voting on Reliance Home Finance Ltd’s (RHFL) debt resolution is currently underway, the Indian lenders have started voting to select the highest bidder for Reliance Commercial Finance, the non-banking finance arm of Reliance Capital.

The voting, to choose the bidder, will end on June 25 and resolve another Rs 9,000 crore of debt of the Anil Ambani group company, said a banking source. The four bidders for RCFL are: Authum Infrastructure and Investment Ltd, UV ARC in consortium with Hawk Capital Pvt. Ltd, Invent ARC and Alchemist ARC.

Both subsidiaries of Reliance Capital Ltd had defaulted on loans and banks started the debt resolution exercise for both companies as per the Reserve Bank of India’s June 7, 2019 circular on Prudential Framework for Resolution of Stressed Assets Directions 2019. Apart from Reliance Capital and Reliance Commercial Finance, the promoter entity – Reliance Capital had also defaulted on bank loans and a separate process to sell assets of RCL is also underway. The lenders are selling the insurance companies and various other assets, including real estate of Reliance Capital. No announcement has been made so far about the winners. The sale process is being undertaken by SBI Caps and JM Financial.

Various Anil Ambani group companies, including Reliance Communications and Reliance Naval and Engineering Ltd, were dragged to the bankruptcy courts by the Indian lenders after they failed to repay their debt. While Mukesh Ambani’s Reliance Industries has emerged as the highest bidder for Reliance Infratel, a subsidiary of Reliance Communications, UV Arc has emerged as the highest bidder for Reliance Communications. The RBI later clarified that asset reconstruction companies cannot bid for companies in the bankruptcy courts and the offer by UV ARC is currently pending.

On June 6, the Board of Reliance Infrastructure announced that it will raise upto Rs 550.56 crore from its promoter, the Anil Ambani family and and Varde Investment. Of this, the Anil Ambani family will invest Rs 400 crore – raising its stake from 5 per cent to 23 per cent while the rest will be invested by Varde Partners for a seven per cent stake.

The board of Reliance Power, a subsidiary of Reliance Infrastructure, is also planning to meet on June 13 to consider fundraising from its promoters.

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