Resolution of two firms to halve Rel Cap debt: Ambani

ANIL AMBANI SAYS RCF AND RHF RESOLUTION WILL REDUCE CONSOLIDATED DEBT BY RS 20,000 CR

Successful completion of the resolution process of Reliance Commercial Finance (RCF) and Reliance Home Finance (RHF) will help Reliance Capital reduce its consolidated debt by 50% or Rs 20,000 crore, Chairman Anil Ambani said on Tuesday.

Earlier this year, lenders had selected Authum Investment and Infrastructure Limited (Authum) as the successful bidder to acquire RCF and RHF. The resolution plan was approved by lenders forming part of the Inter-Creditor (ICA) under Reserve Bank of India's Prudential Framework for Resolution of Stressed Assets, 2019.

While Reliance Capital holds 100% stake in Reliance Commercial Finance (RCF), it is a majority shareholder in Reliance Home Finance (RHF).

Reliance Capital's consolidated debt is Rs 40,000 crore and the resolution of the two lending businesses - RCF and RHF will have an impact on the consolidated debt of Reliance Capital, Ambani said.

"Between these two companies (RCF and RHF), there is a debt of over Rs 20,000 crore, and this will be deconsolidated from Reliance Capital's balance sheet. So, just two transactions for RHF and RCF will drop our debt by a staggering 50% or Rs 20,000 crore," Ambani said during the Reliance Capital's Annual General Meeting (AGM).

Post this, Reliance Capital will have roughly Rs 15,000 crore of secured debt represented by NCDs (non-convertible debentures) or debenture holders, and around Rs 5,000 crore worth of unsecured and guaranteed debt, he added.

He said Authum will pay around Rs 2,200 crore for RCF and close to Rs 2,900 crore for RHF.

"As we now complete the appropriate formalities to close these transactions, we are confident based on the regulatory and other approvals that both these companies will be moving forward under change in management and control," Ambani said.

He said Authum has committed that all the employees of RCF and RHF will be retained.