Insolvency proceedings of Reliance Capital (RCap) are likely to be delayed further, with bidders now seeking shares of group firm Reliance General Insurance Company (RGICL) which are earlier not part of the process.
RGICL’s business is valued at about Rs 5,000-6,000 crore, making it the most valuable asset of RCap, and the administrator and prospective bidders want it to be included under the insolvency proceedings. The shares of RGICL are currently held by IDBI Trusteeship Services (ITSL), sources close to the development said.
In November 2019, ITSL, in its capacity as a debenture trustee of Credit Suisse, had invoked RCap’s entire shares (100%) in RGICL. Following that, shares were transferred to ITSL. Being the custodian of the shares, ITSL would have to release it to the administrator for inclusion in the ongoing IBC process. On its part, ITSL was looking to recover its debt, but now with the commencement of the corporate insolvency resolution process, the administrator has sought to take control of RGICL shares.
“With the administrator not in possession of the shares now, it will not be able to realise any amount of their sale through the CIRP process. This would further delay the whole process,” the source said.
On its part, ITSL had conveyed its inability to hand over the shares as majority of the claims made by Credit Suisse have not been admitted by the administrator.
The deadline for submission of resolution plans for RCap, which had been extended five times, is August 29 and the same for the completion of the process is November 2.
RCap is currently undergoing insolvency proceedings, with the creditors of the former Anil Ambani group company seeking Rs 23,666 crore in dues. At present, there are only five bidders, including a consortium led by Piramal Enterprises, actively pursuing the process, in contrast to 54 expressions of interest (EoIs) the firm had received in March.
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This article was originally posted here.
