IIHL overhauls corp structure for Reliance Capital deal
With barely 20 days left for the deadline for closing the resolution plan, successful resolution applicant IIHL has changed the entire corporate structure of the transaction for the implementation of the resolution plan of Reliance Capital.
As per the new structure, the IIHL has introduced four new companies — Cyqure India Private Limited, Ecopolis Properties Private Limited, Cyqurex Technologies Private Limited, and IIHL BFSI Holding Limited — in the transaction.
According to IIHL, Cyqure India will act as the holding company of Aasia as it will hold a majority stake in Aasia Enterprises, and its shareholders will be the same as that of partners of Aasia — Ashok Hinduja, Harsha Hinduja, and Shom Hinduja.
The other two companies — Cyqurex Technologies and Ecopolis Properties — will be the 100% subsidiaries of Aasia Enterprises. The fourth newly introduced and incorporated company, IIHL BFSI Holding Ltd will be 100% owned by IIHL.
In a recent letter to the Reserve Bank of India (RBI), the IIHL has outlined the new corporate structure while seeking its approval on the same.
In the earlier structure, the Hinduja Group had proposed to implement the entire transaction primarily through two companies — IIHL BFSI (India) Ltd and Aasia Enterprises. RBI’s 17 November 2023 approval was also based on this structure. This approval also ends on 17 May as it was valid for only six months.
According to insolvency experts, with such major changes in the entire corporate structure at this late stage, the 27 May deadline to close the resolution plan for Reliance Capital seems almost impossible now.
Introduction of new companies in the transaction will involve filing of fresh applications for approvals from the IRDAI, SEBI, CCI, and other regulatory bodies.
This could be a blow to the lenders of Reliance Capital led by EPFO, LIC and Provident Funds who have been insisting IIHL on closing the resolution plan within the NCLT directed deadline of 27 May 2024, and make a payment of Rs 9,661 crores to the lenders.
EPFO, LIC and Provident Funds own over 50% of the total debt of Reliance Capital.
“Getting approvals from all the regulatory bodies will be a time-consuming process and the Administrator and COC will be left with no other option but to approach NCLT for seeking an extension for the closure of Reliance Capital resolution plan,” says an expert.
Also See: A lowdown on IIHL’s Rs 9,661 crore resolution plan for Reliance Capital
