In a development that could further delay the insolvency process of Reliance Capital (RCap), the Hinduja Group has sought to change the holding structure of the firms through which it intends to takeover the debt-laden firm. This comes a couple of weeks ahead of the deadline of May 27 set by the National Company Law Tribunal (NCLT) in February to conclude the resolution.
In a recent letter to RBI, IIHL has also sought approvals for the new corporate structure stating the change was to streamline the whole process, sources close to the development said.
IndusInd International Holdings (IIHL), the arm of Hinduja Group which was the successful bidder, has proposed four new firms – Cyqure India, Ecopolis Properties, Cyqurex Technologies and IIHL BFSI Holding – as part of the transaction, sources added.
As per the proposal submitted before the Reserve Bank of India, Cyqure India will be the holding company of Aasia Enterprises, a private family firm with 90% stake held by Ashok P. Hinduja (Hinduja Group chairman), 5% each by Harsha A Hinduja (Hinduja Foundation trustee) and Shom A Hinduja (president, alternative energy and sustainability at Hinduja Group).
Besides, the two new companies – Cyqurex Technologies and Ecopolis Properties – will be wholly-owned subsidiaries of Aasia Enterprises, while IIHL will hold 100% stake in IIHL BFSI Holding.
IIHL is the firm through which the Hinduja Group – the successful applicant for debt-laden firm – had placed its bids for debt-laden RCap.
The stakeholders and partners of Cyqure India will be same as that of Aasia Enterprises, it said.
The move comes 20 days ahead of the deadline to close the resolution plan.
According to the earlier structure, the Hinduja Group had proposed to implement the entire transaction through two companies – IIHL BFSI (India) and Aasia Enterprises. The RBI’s approval granted in November and valid for six months, which end on May 17, was based on this structure.
Sources said that the changes in corporate structure at this stage would have an adverse impact on the resolution process as it comes closer to the deadline. Further, this will also involve filing fresh applications for approvals with IRDAI, SEBI, CCI and other regulatory bodies.
This also comes at a time when the lenders of RCAP led by EPFO, LIC and Provident Funds, who have been insisting IIHL close the resolution plan before the May 27 deadline and make a payment of Rs 9,661 crores to the lenders at the earliest. The lenders – EPFO, LIC and Provident Funds – own over 50% of the total debt of RCap.
Getting approvals from all the regulatory bodies will be time-consuming and the administrator and CoC will be left with no other option but to approach NCLT and seek another extension to the deadline for the closure of RCap’s resolution process.