LIC finds no purchaser amongst ARCs for Rs 3,400 crore Reliance Capital bonds

LIC’s plan to promote its publicity in Rs 3,400 crore bonds issued by Reliance Capital (RCAP) discovered no takers amongst asset reconstruction corporations (ARCs) because the deadline for submission of expression of curiosity (EoI) Closed on Monday.

A number of sources mentioned that ARC didn’t discover the choice of shopping for the bonds of the bankrupt agency enticing and determined to provide it a miss. IDBI Capital, which has been mandated to promote bonds, will lengthen the deadline to July 22, a supply mentioned. The bond is to be auctioned after the EOI to promote it.

RCAP was referred to chapter court docket in November final yr after it defaulted on its loans to lenders together with Life Insurance coverage Company of India (LIC) and a number of other different banks and provident funds.

RCAP bonds are at present buying and selling at 70 per cent low cost to the bond quantity and have already left an enormous gap within the pockets of buyers. If LIC or some other investor have been to promote their bonds out there, they’d get better round 30 per cent of their funding within the bonds.

A number of lenders, together with LIC, have claimed a complete of Rs 25,333 crore in opposition to RCAP. In response to an commercial by IDBI Capital Markets & Securities final month, since there was a delay within the sale of property, LIC had sought bids from ARC to promote its bonds.

Whereas some buyers are exiting the non-banking monetary providers agency by promoting their bonds out there at large losses, a distinct course of is at present underway to promote the property of the corporate. Of the 54 corporations that had submitted their EOIs to amass the corporate’s property, thus far solely Piramal Enterprises and Torrent Group are left within the race and are doing due diligence for your complete agency. Zurich Insurance coverage Group and American non-public fairness agency Blackstone have proven curiosity for common insurance coverage group, whereas Cholamandalam Group has proven curiosity within the life insurance coverage enterprise.

Tata AIG Common Insurance coverage Firm, a subsidiary of Tata Sons, has dropped out of the race to purchase Reliance Common Insurance coverage Firm, the final insurance coverage arm of Reliance Capital, following a delay within the sale and in mild of a rule that the corporate ought to Must bid. Different corporations as companions with different bidders.

The rule of bidding for a couple of enterprise with different bidders was made halfway by the lenders to get higher bids for all of the property.

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