BIG DEVELOPMENT! Authum places highest bid value of Rs 2,887 cr for Reliance Home Finance (RHF) acquisition

As the voting for the successful bidder and the resolution plan of Reliance Home Finance (RHF) started on 31 May 2021 and will continue till 19 June 2021, Authum Investment and Infrastructure’s resolution plan has been selected by the Lenders in a closely contested bidding process managed by BOB Capital Markets (BoB Caps) and Ernst & Young (EY) along with Bank of Baroda as the Lead Bank.

Authum is a domestic NBFC with around 15 years of presence and over Rs 1500 crore networth as on 31 Dec 2021. 

The voting for Reliance Home Finance in favour of Authum Investment and Infra has already crossed the threshold of 75 per cent in value terms and 60 per cent in terms of numbers. 

HIGHLIGHTS

- AUTHUM IFRASTRUCTURE AND INVESTMENT (AUTHUM) PLACED HIGHEST BID VALUE OF Rs 2887 CRORE for RELIANCE HOME FINANCE (RHF) acquisition 

-SECOND SUCCESSFUL RESOLUTION UNDER 07 JUNE 2019 CIRCULAR OF RBI OUTSIDE NCLT LENDERS TO RECEIVE 2887 CRORE OF WHICH  2587 CRORE (90%) IS UPFRONT AND REMAINING 300 CRORE (10%) WITHIN 1 YEAR

-RHF HAS A CASH BALANCE OF RS 1800 CASH 31 MARCH 2021 WHICH WILL BE DISTRIBUTED AMONG ALL LENDERS

Authum’s resolution plan offering the highest bid value in NPV terms has received over 75% of the voting by value and over 60% by numbers. Sources indicate that the lenders will receive 90% of the overall plan proceeds upfront, while the remaining 10% within 1 year. 

The other 3 bidders are ARES SSG (global fund with over US$ 8 billion under management) along with Assets Care & Reconstruction Enterprise Ltd., Avenue Capital (global fund with over US$ 9.5 billion under management) jointly with ARCIL and Capri Global Capital Limited – a domestic NBFC. 

The resolution process is being managed by BoB Capital Markets (BoB Caps) and Ernst & Young (EY) along with Bank of Baroda as the Lead Bank. 

The final resolution plans have crossed the fair value of the company as assessed by 2 independent valuers. The recovery is high as Rs 1800 crore of cash available with RHF as on 31 March 2021, will be distributed to Lenders along with plan proceeds. 

RHF resolution is the only successful resolution post Altico in March 2020, under 07 June 2019 Direction of RBI on Prudential Framework for Resolution of Stressed Assets.

This resolution is positive for parent company Reliance Capital.

The voting for Reliance Home Finance in favour of Authum has already crossed the threshold of 75% in value terms and 60% in terms of numbers. 

The 4 final bidders, whose are placed for voting are; 

a. 

ARES SSG (global fund with over US$ 8 billion under management) along with Assets Care & Reconstruction Enterprise Ltd. 

b. 

Authum Infrastructure and Investment Ltd. – a domestic NBFC with strategic interest

c. 

Avenue Capital (global fund with over US$ 9.5 billion under management) jointly with ARCIL 

d. 

Capri Global Capital Limited – a domestic NBFC

The final voting will end on 19th June.