Lenders are ready to recover the settlement amount for Reliance home finance | Daily News Byte

Lenders are ready to recover the settlement amount for Reliance home finance

 | Daily News Byte


Eight months after agreeing to sell Anil Ambani-promoted Reliance Home Finances (RHFL) Authum Investments and Infrastructure, the lenders are finally set to recover the settlement amount later this week, two people familiar with the development told ET.

The Delhi High Court on December 21 lifted the stay on distribution of proceeds from the sale of RHFL after the two disputing creditors – the Shapoorji Pallonji entity and lenders led by Bank of Baroda – agreed on a ‘conditional settlement’.

Authum Investment will distribute ₹ 1,565 crore to 33 lenders who have signed an inter-creditor agreement (ICA), the people cited above said.

According to the terms of the settlement, Shapoorji Pallonji’s (SP) entity Always Remember Properties Pvt Ltd, which had demanded Rs 200 crore, will get a settlement amount of Rs 46 crore. It is proportionate to the amount distributed to other creditors under the resolution plan and court order.

Following an appeal by the SP Group in November 2019 seeking a settlement of Rs 200 crore, the Delhi High Court restrained RHFL from disposing, alienating or encumbering, directly or indirectly, any of its assets. This prevented the lenders from completing the RHFL debt settlement process.

As per the terms of the settlement, a sum of ₹ 154 crore – the remaining amount claimed by the SP entity – will be deposited with the Delhi High Court. The order stated that this amount “will be paid to the appropriate party based on the outcome of the arbitration” between the parties involved.

The biggest beneficiary of the income distribution would be Yes Bank. It would get ₹ 319 crore, followed by Bank of Baroda, with ₹ 262 crore. Among other lenders, Life Insurance Corp would get Rs 184 crore, Canara Bank Rs 150 crore and Punjab & Sind Bank Rs 138 crore. Lenders who have signed the ICA should sign a consent agreement stating that they will set aside the settlement amount in the event of any adverse order by the competent authority.

In June 2021, Authum emerged as the winning bidder for RHFL offering Rs 2,683.23 crore to lenders and NCD holders. However, this offer did not include Rs 200 crore in arrears of SP Group entities.

Currently, Authum will distribute 1,565.7 million dinars among creditors who sign the consent agreement by the end of the month.

An amount of Rs 223 crore has been allocated to retail bondholders holding up to 5 crore bonds, while a sum of Rs 896 crore has been earmarked for non-ICA lenders. Reliance Home Finance has total arrears of Rs 11,541 crore.

This is the second company of Anil Ambani after Reliance Commercial Finance to be acquired by Authum Investment. The parent company, Reliance Capital, is in insolvency proceedings, and Hinduja Group and Torrent Investment have outbid each other to buy the core investment company.

Last week, Hinduja made an improved offer of Rs 9,400 crore a day after the auction ended compared to Rs 8,640 crore offered by Torrent Investment in the auction held on Wednesday.


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