Authum with an auction value of Rs 2,887 crore ready to acquire Reliance Home Finance, Real Estate News, ET RealEstate
Reliance Home Finance’s vote in favor of Authum Investment and Infra has already passed the 75% mark in value and 60% in number. The final vote will end on June 19.
Authum Investment and Infrastructure’s resolution plan was selected by lenders through a fair, transparent and tightly contested bidding process managed by BOB Capital Markets (BoB Caps) and Ernst & Young (EY ) with Bank of Baroda as the primary bank, as per bank source.
Authum is a national NBFC with approximately 15 years of presence and over 1,500 crore in net worth as of December 31, 2020.
As such, lenders will receive Rs 2,887 crore, of which Rs 2,587 crore – 90 percent – is prepaid and the remaining Rs 300 crore – 10 percent – will be paid within one. year.
Reliance Home Finance (RHF) has a cash balance of Rs 1,800 crore as of March 31, 2021, which will be split among all lenders. The positive impact will be on Reliance Capital with a debt reduction of Rs 11,200 crore, or more than 25 percent.
Authum’s resolution plan with the highest NPV auction value received over 75 percent of the votes in value and over 60 percent in number.
The other three bidders are ARES SSG (global fund with over $ 8 billion under management) with Assets Care & Reconstruction Enterprise Ltd., Avenue Capital (global fund with over $ 9.5 billion under management) jointly with ARCIL and Capri Global Capital Limited – – a domestic NBFC.
The final resolution plans cross the fair value of the company as assessed by two independent valuers. The payback is high as Rs 1,800 crore of cash available with RHF as of March 31, 2021 will be distributed to lenders with the proceeds of the plan.
The RHF resolution is the only successful resolution after Altico in March 2020, under the leadership of the RBI on June 7, 2019 on the prudential framework for the resolution of stressed assets.