Lenders Voice Concerns Over Reliance Capital Deal Amid IIHL Debt Terms

Lenders to debt-laden Reliance Capital are raising concerns over the terms of a Rs 7,300 crore debt proposed by IIHL for its acquisition. The Committee of Creditors (CoC) is apprehensive about the conditions for the debt, which might impair the execution of the resolution plan. IIHL is under pressure to provide clearer terms.

Lenders to debt-laden Reliance Capital are raising alarms over the terms put forth by IIHL, a Hinduja Group firm, for mobilizing Rs 7,300 crore in debt for the acquisition. The Committee of Creditors (CoC) has highlighted numerous conditions set by bankers to IIHL that, according to sources, could hinder the execution of the resolution plan.

The concerns revolve around the feasibility of drawing down the required funds to settle payments to Reliance Capital's debtors. Sources indicate that some conditions can only be met post-execution of the resolution plan, making the needed financial drawdown nearly impossible.

Meanwhile, IIHL has yet to respond to inquiries about the issue. Additional terms might also emerge in final binding agreements, further complicating the situation. The CoC is now requesting IIHL to provide definitive documents for review, ensuring that the terms are clear and feasible.

(With inputs from agencies.)