Two Reliance Capital arms on sale! EoIs invited for Reliance Home Finance and Reliance Commercial Finance

Reliance Home Finance and Reliance Commercial Finance are subsidiaries of Anil Ambani-promoted Reliance Capital.

By Ankur Mishra

Lenders to Reliance Home Finance (RHF) and Reliance Commercial Finance (RCFL) have invited expressions of interests (EoIs) from bidders. The lenders, led by Bank of Baroda (BoB), have given a choice to bidders for acquiring the whole company or combination of its asset book. Suitors for Reliance Home Finance need to submit EoIs by August 31 while the deadline for submission of EoIs for Reliance Commercial Finance ends on August 11.

Reliance Home Finance and Reliance Commercial Finance are subsidiaries of Anil Ambani-promoted Reliance Capital. While Reliance Home Finance has a total debt of Rs 13,000 crore, Reliance Commercial Finance has total borrowings of Rs 9,812 crore. BoB is the lead creditor for both the companies.

In July 2019, the lenders had signed separate inter-creditor agreements (ICAs) for Reliance Home Finance and Reliance Commercial Finance to find resolution in six months according to the June 7 circular of the Reserve Bank of India. The ICAs have been extended till September 30, 2020.

Reliance Home Finance had earlier reported a net loss of Rs 161.34 crore during the first quarter of 2020-21, against a net profit of Rs 48.63 crore in the year-ago period. The company had defaulted in payment of borrowings obligations amounting to Rs 6,108.44 crore as on June 30, 2020. The asset cover has also fallen below 100% of outstanding debentures amounting to Rs 5,966 crore, according to notes to accounts.

Similarly, Reliance Commercial Finance reported a net loss of Rs 852 crore for the March quarter. “The company’s ability to meet its obligations is significantly dependent on material uncertain events including restructuring of loans and achievement of debt resolution under the ICA framework,” auditors said.