Authum tops in Reliance Home bids

MUMBAI: Authum Investment and Infrastructure has emerged as the highest bidder for Reliance Home Finance (RHF), a subsidiary of Anil Ambani’s Reliance Capital. The book value of the assets on offer are around Rs 12,554 crore and Authum’s bid of Rs 2,887 crore (net present value) would lead to 23% immediate recovery for lenders.
The Alpana Dangi-promoted Authum is a Mumbai-based NBFC with a focus on capital markets. Once the lenders approve of a bid, they will need to get clearance from the RBI for the company to change hands. The central bank has the power to reject a change in ownership if it feels that the new directors that come in do not meet its fit-and proper criteria.
The second-highest bidder is understood to be Hong Kong-based distressed asset fund ARES SSG along with Assets Care & Reconstruction Enterprise which has bid around Rs 2,770 crore — that works out to a 22% recovery for lenders. The othertwo bidders are Avenue Capital, another global fund that has bid jointly with Asset Reconstruction Company of India (Arcil), and the NBFC Capri Global.
The voting for the best bid and resolution plan for RHF among the lenders concluded on Wednesday. Unlike other large debt resolutions, RHF is being restructured under the June 7, 2019 circular that provides a framework outside the bankruptcy proceedings.
The resolution process is being managed by BoB Capital Markets along with management consultants Ernst & Young with Bank of Baroda as the lead bank.
Along with RHF, lenders are also pursuing the resolution of Reliance Commercial Finance, another subsidiary of Reliance Capital. Once these two businesses are sold, Reliance Capital will end up resolving nearly Rs 20,000 crore of debt. Care Ratings had downgraded RHF and Reliance Commercial Finance to default in 2019. Subsequently, lenders had classified the loan as non-performing and initiated recovery proceedings.

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