As per the NCLT (National Company Law Tribunal) order and SEBI (Securities and Exchange Board of India) (Delisting of Equity Shares) Regulations, 2021, the equity shares of Reliance Capital Limited (RCL) will be delisted from stock exchanges.
Reliance Capital Limited (RCL) announced in an exchange filing on Wednesday that its existing equity shares are expected to be delisted from the stock exchanges as part of the approved resolution plan.
In the exchange filing, the company announced that the National Company Law Tribunal (NCLT), as part of its approved resolution plan for the firm, is considering the delisting of existing equity shares from the exchanges.
In the exchange filing, under the section titled “Proposed steps to be taken by the incoming investor/acquirer for achieving the Minimum Public Shareholding,” it stated: “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 indeed be delisted from stock exchanges. The liquidation value for RCL’s equity shareholders has been determined to be NIL, indicating that they will not receive any payment or offer. Furthermore, as per the NCLT Approval Order, the entire existing share capital of RCL will be canceled and extinguished without compensation.
As per the filing, IIHL and/or the Implementing Entity, along with their nominees, will become the sole shareholders of RCL. The delisting procedures will be initiated by the stock exchanges 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 be delisted from the stock exchanges in accordance with the order of the NCLT and SEBI (Delisting of Equity Shares) Regulations, 2021. The liquidation value of the equity shareholders of RCL is determined to be NIL, meaning they will not be entitled to receive any payment, and no offer will be made to any shareholder of RCL.
Furthermore, the entire existing share capital of RCL is proposed to be canceled and extinguished for NIL consideration as per the NCLT Approval Order, ensuring that IIHL and/or the Implementing Entity, along with their nominees, are the only shareholders of the Corporate Debtor.
The stock exchanges will undertake all necessary actions to delist the equity shares of RCL in accordance with the Approved Resolution Plan and applicable laws, including the SEBI (Delisting of Equity Shares) Regulations, 2021, and will issue necessary orders/directions to this effect.
On Tuesday, the NCLT granted approval 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, endorsed the resolution plan submitted by IIHL.
As part of the Approved Resolution Plan, the entire existing share capital of RCL is proposed to be canceled and extinguished for NIL consideration, as per the NCLT Approval Order. This arrangement ensures that IIHL and/or IIHL BFSI (India) Limited, referred to as “the Implementing Entity,” along with its nominees, become the sole shareholders of the Corporate Debtor.
Furthermore, the filing noted that as of FY23, the total assets of RCL were ₹12,142.14 crore.
The Reserve Bank of India (RBI) took over the board of the Anil Ambani group’s firm in November 2021 due to governance issues and payment defaults. 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, out of which ₹26,087 crore were 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. This led to a challenge mechanism, 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.
Following this development, the stock witnessed a decline of 4.46 percent, trading at ₹11.79.
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