March 07, 2019:
Reliance Capital Ltd, a part of billionaire Anil Ambani-controlled Reliance Group, is to reduce its debt by about Rs. 10,000-12,000 crore in the next 3-4 months.
The reduction, which is about 50-60% of Reliance Capital’s debt, will be achieved by monetisation of its 43% stake in Reliance Nippon Life Asset Mgmt Ltd (RNAM) and 49% stake in Reliance General Insurance Company Ltd (RGICL), along with several non-core investments, the company said in a statement.
The completion of these transactions will be a major step forward in Reliance Capital’s deleveraging strategy, it added.
Reliance Capital will monetize its 43% stake in RNAM, which is currently valued at over Rs 5,000 crore. The strategic sale of the controlling stake in RNAM is expected to be at a significant premium to market.
Reliance Capital will monetise its 49% stake in RGICL (at present 100 per cent owned). RGICL had filed a Draft Red Herring Prospectus (DRHP) for an IPO with SEBI on Feb 8, 2019.
Reliance Capital, a private sector financial services company, is at an advanced stage of monetizing several valuable non-core investments, including a strategic stake sale in Prime Focus and other media assets, it added.
Reliance Capital Ltd has termed a rating action by CARE as “completely unjustified and inappropriate”.
CARE has disregarded imminent liquidity events that will substantially reduce the overall debt, and the rating agency has “arbitrarily” refused to provide an opportunity to meet the external member of the review committee, Reliance Capital said in a statement.
The constitution of the review committee – majority comprising employees of the rating agency - is biased and designed to affirm all proposed rating actions, it added.
“CARE has turned review process prescribed by SEBI into a futile, pointless and unfair exercise,” it added.
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