Kotak Special Situations Fund (KSS), Asset Reconstruction Company (India) Ltd (Arcil), Acre ARC in association with their foreign partners, non banking finance company Authum Investment and Infrastructure and Capri Global are five bidders that have submitted final binding bids to buy the debt-laden Reliance Home Finance Ltd (RHFL), multiple people familiar with the process told ET.
Only two of the bidders, Acre ARC and Authum have bid for the whole company. Acre has bid in association with its largest shareholder Aries-SSG Capital. The other three bidders have bid only to buy out the retail loan portfolio of the company, these people said.
“Acre is leading the bid while Aries is backing it financially. The company has given a comprehensive restructuring plan which will take care of employees as well and hence would be acceptable to all stakeholders. Similarly Authum has given a plan for the whole company,” said a person cited above.
Bidders had to give a Rs 10 crore guarantee to qualify for the process. The last day for submitting the bids was January 15. BoB Capital Markets, the investment banking arm of Bank of Baroda, and consultancy firm EY are helping lenders with the process.
Total dues to lenders at the end of December are 11,000 crore. The total loan book as of the start of the fiscal was about Rs14,000 crore and about Rs 4000 crore of which were home loans and commercial loans to builders. Bidders are wary of the large amount of inter corporate lending in the company’s book.
“The inter corporate book is more than two times the retail and could have a larger stressed pool so a majority of the bidders looking to buy that as a portfolio purchase rather than the whole company,” said a second person involved in the process.
Lenders led by Bank of Baroda (BoB) are seeking buyers for the debt-laden company through an inter-creditor agreement outside the Insolvency and Bankruptcy Code (IBC).
KSS, Arcil ARC has teamed up with its largest shareholder, New York-based distressed fund Avenue Capital and Mumbai based non banking finance company Capri Global have all bid for only the retail portfolio, people cited above said.
Individual investors could not be contacted immediately.
Lenders are following up on three separate tracks to recover loans from the Anil Ambani-led financial services companies that also include Reliance Commercial Finance and holding company Reliance Capital.
Lenders are hopeful of finding a buyer for RHFL before the end of the fiscal year.
“We have seen good competition among bidders so far. We are expecting atleast a 40% recovery on the lines of what DHFL received earlier this month. Bids are now being evaluated and we expect to decide on the preferred bidder by the end of the month, following which other bidders will be given a chance to match it through a Swiss challenge process,” said a third person involved in the process.
Bidders are wary of any unknowns in the financials of the company as it is a large complex asset and the biggest among Anil Ambani’s financial services porfolio.
Source: Economic Times