Authum Investment and Infrastructure, a NBFC with around 15 years of presence and over Rs 1,500 crore net worth as on December 31, was selected by the lenders of Reliance Home Finance Ltd (RHF) as the winning bidder.
The voting, that started on May 31 and concluded at 5 p.m. on June 19, saw participation from over 91 per cent of the Lenders by value.
Banking sources said the lenders that have voted have unanimously and selected Authum’s plan over other competing plans.
As informed by some lenders, Authum’s plan was selected as (1) it offered highest NPV, (2) Entire plan proceeds to be received by lenders in less than 1 year with over 90 per cent to be received upfront, (3) Has fewer and reasonable conditions, (4) scored highest in terms of ease of implementation, (5) confidence in Authum’s ability to meet its commitments in a time bound manner, and (6) it was comprehensive addressing all the stakeholders, including RHF employees and customers.
One of the lenders opined that in addition to being the highest bidder its commitment to continuity of employees was a major positive compared to other plans submitted by ARES SSG (global fund with over $8 billion under management) along with Assets Care & Reconstruction Enterprise Ltd, Avenue Capital (global fund with over $9.5 billion under management) jointly with ARCIL and Capri Global Capital Ltd – a domestic NBFC.
Though the plan has been selected considering that overwhelming majority has been received, the lead bank and the lenders have agreed to accept votes from the few remaining lenders that are yet vote as their internal approvals are awaited.
The resolution process, with Bank of Baroda as the Lead Bank and BoB Capital Markets (BoB Caps) and Ernst & Young (EY) as process advisors, ensured selection of the successful plan in a fair, transparent and time bound manner with significant recoveries outside the IBC process.
RHF resolution is the only successful resolution post Altico in March 2020, under the June 7, 2019 Direction of RBI on Prudential Framework for Resolution of Stressed Assets.
RHF debt resolution is a major shot in the arm to debt reduction plans of Reliance Capital Ltd (RCL). The debt of RCL to come down by over Rs 11,200 crore RHF resolution i.e. more than 25 per cent debt reduction.