Banking News

brookfield: Brookfield, Cerberus, Deutsche Bank among lenders keen to fund Hindujas’ Reliance Capital bid

Mumbai: Brookfield, Cerberus, and Deutsche Bank have submitted term sheets to the Hinduja Group for financing the acquisition of Anil Ambani-promoted Reliance Capital, the debt-laden financier undergoing bankruptcy resolution. IndusInd International Holdings (IIHL), the holding company of the Hinduja Group, plans to raise up to ₹7,000 crore to fund this acquisition.

While major lenders have offered term sheets of up to ₹6,000 crore, smaller funds have shown interest in providing loans ranging from ₹800 crore to ₹1,000 crore, contributing to the larger financing package.

In July, the committee of creditors (CoC) approved Hinduja Group’s bid of ₹9,650 crore for the acquisition of Reliance Capital, pending court and regulatory approvals.

“While Brookfield, Cerberus, and Deutsche Bank have submitted large term sheets, some smaller lenders have proposed smaller loans. However, IIHL is looking for a large loan of ₹6,000 crore,” said a source familiar with the matter. “Brookfield is willing to cover the entire amount, but Cerberus and Deutsche Bank are exploring options to participate in part of the financing, possibly involving other funds.”

Spokespersons of Brookfield, Cerberus and IIHL did not respond to ET’s request for comment. A Deutsche Bank spokesperson declined to comment.

The strategy revolves around financing the acquisition, focusing on growth over the next 3-4 years, and subsequently raising equity through the capital market, said the second source. Term sheets involve structured capital, with all parties eyeing potential equity gains. “This structured debt is designed to reduce fixed costs,” the source said.IIHL prefers that funds and banks do not engage in further distribution.”Several funds have submitted term sheets ranging from $200 million to $300 million (equivalent of ₹1,600 crore to about ₹2,400 crore), but the Hinduja family’s preference is to avoid distributing debt stacks through banks,” the second source said.

In August, the Supreme Court declined to halt bankruptcy proceedings at the National Company Law Appellate Tribunal (NCLAT), which is reviewing the approval granted to the Hinduja Group’s resolution plan for acquiring Reliance Capital.

During the initial bidding on December 21, Gujarat-based Torrent Investments emerged as the highest bidder with an offer of ₹8,640 crore, while the Hinduja Group entity proposed ₹8,110 crore. However, the Hinduja Group later increased its bid to ₹9,000 crore, a move challenged by Torrent at the National Company Law Tribunal (NCLT). Torrent argued that this revised offer violated the integrity of the auction process, as it was submitted after the deadline.

While the NCLT bench ruled in favour of Torrent, preventing lenders from conducting a second auction, the appellate authority overturned the tribunal’s decision.

Source link