Mumbai-based non-banking finance company Authum Investment and Infrastructure has been declared as the preferred bidder for Anil Ambani’s debt laden Ltd (RHFL) with over 90% of the creditors voting for the company.
Saturday was the last date for the voting which started on May 31 and creditors which included private and public sector banks and bondholders selected Authum to take over the company.
Creditors are effectively taking a 82% haircut on the Rs 11,200 crore owed by RHFL to them.
“Over 90% of the creditors selected Authum as their preferred bidder largely due to higher net present value (NPV) assigned to it because it is offering higher cash upfront and has promised to make the deferred payment within on year,” said a person familiar with the vote.
Authum’s best offer was cash upfront of Rs 1724 crore and a further Rs 300 crore through 8% NCDs payable within one year. Creditors had assigned a recovery value of 22.99% on a NPV basis, higher than the 22.65% they have assigned to the next best offer by Hong Kong-based distressed asset specialist Ares SSG together with its local arm Acre ARC.
Acre’s best offer included Rs 1714 crore of cash up front and another Rs 23 crore through security receipts, which are typically redeemed only after recovery of loans.
Other bidders included Asset Reconstruction Company (India) Ltd (Arcil), in association with its largest shareholder Avenue Capital, and Capri Global.
“We have gone purely in the commercial aspects of the bids before us and made our decision. It will be officially announced soon. It is a clear result,” said another person aware of the process.
Both offers on the table were about half of the 40% recovery expected by creditors at the start of the process. All bidders have assumed Rs 863 crore cash on the RHFL’s books at the end of June 2020.
Alpana Dangi-promoted Authum is a non-bank focused on capital markets based in Mumbai. Bankers said it plans to expand its business through this portfolio acquisition.
Yes Bank with 13% of the debt and lead lender Bank of Baroda (BoB) with close to 11% are the top two creditors.
is third on that list, holding just about 5% of the debt. Bond holders constitute 41% of the debt.
BoB Capital Markets, the investment banking arm of BoB, and consultancy firm EY are helping lenders with the process. RHFL is among the biggest in Anil Ambani’s financial services portfolio, which includes commercial finance and insurance businesses.