Reliance Capital restructures its commercial finance arm

Mumbai, March 24 (IANS) Reliance Capital, a part of Anil Ambani-led Reliance Group, on Friday said it has completed the transfer of its commercial finance division -- Reliance Commercial Finance Ltd. (RCFL) -- into a separate wholly-owned subsidiary as part of its restructuring process.

RCFL is amongst the leading SME (Small and Medium-sized Enterprise) lenders in the Indian non-banking finance space with a focus on asset backed lending and productive asset creation.

"Reliance Commercial Finance now stands as a fully owned subsidiary of Reliance Capital. This completes our restructuring process as Reliance Capital moves to become a core investment company from next fiscal," said Anmol Ambani, ED, Reliance Capital.

"This transfer will align RCFL with the overall operating structure of Reliance Capital wherein all operating businesses are held either as wholly-owned or majority-owned subsidiaries," he added.

Ambani also said the proposal would enhance management focus and provide flexibility to the company to unlock value through stake sale.

In February last year, the company had announced transfer of its commercial finance division into a separate subsidiary, subject to requisite regulatory, high court and Reliance Capital shareholders' approvals, which have since been received.

The company's shareholders had approved the transfer by an overwhelming majority of 99.99 per cent votes in favour of the Scheme of Arrangement at the court-convened equity shareholders meeting held in last September.

The commercial finance division has an aggregate asset under management (including securitised portfolio) portfolio of Rs 16,191 crore (US$ 2.4 billion) as of December 31, 2016.

Reliance Nippon Life Insurance and Reliance Nippon Life Asset Management, both subsidiaries of Reliance Capital, already have a strategic partner -- Nippon Life Insurance -- with 49 per cent stake in each business.

The transfer will also enhance employee engagement and retention through ability to grant ESOPs (Employee Stock Option) in the business.

"The transfer, pursuant to the Scheme of Arrangement, will be effective from April 1, 2016. Reliance Capital would be applying to the RBI for registering itself as a Core Investment Company (CIC) and expects to become a CIC soon, subject to necessary approvals," the company statement said.