Reliance Capital Limited (RCL) in an exchange filing on Wednesday announced that its existing equity shares are likely to be delisted from the stock exchanges as part of the approved resolution plan.
The company in the exchange filing announced that the National Company Law Tribunal (NCLT) in its 'approved resolution plan' for the firm is contemplating delisting of existing equity shares from the exchanges.
In the exchange filing, under 'Proposed steps to be taken by the incoming investor/ acquirer for achieving the Minimum Public Shareholding', it said: “Not applicable, since the Approved Resolution Plan contemplates delisting of existing equity shares.”
As per the NCLT order and SEBI (Delisting of Equity Shares) Regulations, 2021, the equity shares of RCL will be delisted from stock exchanges. The liquidation value for RCL's equity shareholders is determined to be NIL, meaning they won't receive any payment or offer. The entire existing share capital of RCL will be canceled and extinguished without compensation, as per the NCLT Approval Order.
IIHL and/or the Implementing Entity, along with its nominees, will become the sole shareholders of RCL. The stock exchanges will initiate delisting procedures in compliance with the Approved Resolution Plan and relevant regulations, including the SEBI (Delisting of Equity Shares) Regulations, 2021.
"The equity shares of RCL will stand delisted from the stock exchanges in accordance with the order of the NCLT read with SEBI (Delisting of Equity Shares) Regulations, 2021. The liquidation value of the equity shareholder of RCL is NIL and hence, equity shareholders will not be entitled to receive any payment and no offer will be made to any shareholder of RCL. The entire existing share capital of RCL is proposed to be cancelled and extinguished for NIL consideration by virtue of the NCLT Approval Order such that IIHL and/or the Implementing Entity, and its nominees, are the only shareholders of the Corporate Debtor. The stock exchanges shall take all necessary actions to delist the equity shares of RCL; in accordance with the Approved Resolution Plan read with applicable law, including, but not limited to the SEBI (Delisting of Equity Shares) Regulations, 2021, as amended and shall pass necessary orders/directions to this effect," instructed the filing.
Meanwhile, the NCLT granted approval on Tuesday for the acquisition of Reliance Capital (RCL) by the Hinduja group firm IndusInd International Holdings Ltd (IIHL). The tribunal's two-member bench, consisting of Prabhat Kumar, member (technical), and Justice V.G. Bisht, gave their endorsem*nt to the resolution plan submitted by IIHL.
"As part of the Approved Resolution Plan, the entire existing share capital of RCL is proposed to be cancelled and extinguished for NIL consideration by virtue of the NCLT Approval Order such that IIHL and/or IIHL BFSI (India) Limited (“the Implementing Entity”) and its nominees are the only shareholders of the Corporate Debtor," the filing stated.
The filing also noted that as of FY23, total assets of RCL were ₹12,142.14 crore.
Following governance issues and payment defaults, the Reserve Bank of India (RBI) took over the board of the Anil Ambani group's firm in November 2021. Subsequently, on December 2, 2021, the RBI filed a petition with the tribunal to initiate the Corporate Insolvency Resolution Process (CIRP) for RCL. Nageswara Rao Y was appointed as the administrator, who then invited bids in February 2022 for taking over the company.
After the Corporate Insolvency Resolution Process (CIRP), creditors filed claims exceeding ₹38,500 crore, with ₹26,087 crore being admitted. IndusInd International Holdings Ltd (IIHL) proposed a resolution plan offering ₹9,661 crore for Reliance Capital, supplemented by the company's cash balance of ₹500 crore, which would be directed to the lenders.
Initially, four resolution plans were submitted, but all were rejected by the committee of creditors due to lower bid values. A challenge mechanism ensued, with IIHL and Torrent Investments participating.
In June 2023, the Hinduja Group's bid of ₹9,661 crore in upfront cash was selected by the lenders.
The stock was down 4.46 percent at ₹11.79 post the news.
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First Published:
28 Feb 2024, 11:55 AM IST
