Reliance Capital Ltd (RCL), part of debt-ridden Anil Ambani-promoted Reliance Group, has invited bids for sale of its subsidiaries, including Reliance General Insurance and Reliance Nippon Life Insurance, to repay loans of about Rs 20,000 crore.
According to sources, the process for inviting Expression of Interest (EOI) for its key assets was launched on October 31, 2020, with a view to unlock value of its underlying businesses and targets to make RCL debt free.
EOIs invited for all or part of RCL's stake of subsidiaries Reliance General Insurance, Reliance Nippon Life Insurance Company, Reliance Securities, Reliance Financial Limited and Reliance Asset Reconstruction Limited.
Monetization process is run under the aegis of Committee of Debenture Holders and the Debenture Trustee Vistra ITCL India Ltd - which represents 93 per cent of total outstanding debt of RCL, sources said.
The company proposes to exit from its wholly-owned subsidiary Reliance General Insurance Company Limited (RGI) with paid up capital of Rs 252 crore as of September 30, 2020, sources said, adding that 51 per cent stake in Reliance Nippon Life Insurance Company is also for sale.
Reliance Nippon Life Insurance Company, a joint venture with Japan's largest life insurer-Nippon Life which holds 49 per cent shareholding, has a paid-up capital of Rs 1,196 crore at the end of September 30, 2020.
The life insurer with asset under management of Rs 21,912 crore at the end of September had posted a profit of Rs 35 crore during 2019-20.
Besides, it plans to sell 100 per cent stake in broking arm Reliance Securities and RBI-registered NBFC Reliance Financial Limited engaged in the business of financing, money lending, capital market linked financing activities.
It wants to exit from Reliance Health Insurance other PE investments like Naffa Innovations Private Limited, and Paytm E-Commerce Private Limited.
In addition, RCL has put on sale 49 per cent stake in Reliance Asset Reconstruction Limited which manages portfolio of Rs 1,996 crore as of September 30, 2020.
It has 20 per cent stake in Indian Commodity Exchange, a SEBI-regulated commodity derivatives exchange, on sale.
Other key shareholders in ICEX are Central Warehousing Corporation, MMTC Limited, Indiabulls Housing Finance Limited, Indian Potash Limited and Bajaj Holdings and Investments.
SBI Capital Markets Limited and JM Financial Services Limited will run an independent and transparent asset monetization process, sources said.
The principal amount due to HDFC is Rs 523.98 crore and to Axis Bank Rs 100.63 crore. The total amount of outstanding borrowings from banks and financial institutions works out to Rs 679.23 crore, including accrued interest up to August.
"The total financial indebtedness of the listed entity including short-term and long-term debt totals Rs 19,805.7 crore, including interest accrued up to August 31, 2020," RCL had said in regulatory filings recently.
In July, the company had said it has defaulted in repayments to lenders and debenture holders and incurred losses during the June quarter, which indicate that material uncertainty exists that may cast a significant doubt on the company's ability to continue as a going concern.