Anil Ambani, the chairman of Reliance Group. Photo: AFP / The Times of India

Embattled tycoon Anil Ambani, the younger brother of India’s richest man Mukesh Ambani, plans to sell off more assets to repay his creditors.

At an investors’ meeting in Mumbai, he declared his Reliance Group was planning to pay creditors 150 billion rupees (US$2.1 billion) by March.

His finance unit Reliance Capital has decided close two of its divisions – Reliance Commercial Finance and Reliance Home Finance – by December. These divisions had cumulative assets of more than 250 billion rupees ($3.54 billion). Reliance Capital has a presence in the credit, insurance and mutual funds sectors.

This will be the second major business the Reliance Group is exiting after mobile phone service provider Reliance Communication was shuttered two years ago and is now in the bankruptcy process.

“As part of the business transformation, Reliance Capital has decided to exit the lending business. Both our lending businesses – Reliance Commercial Finance and Reliance Home Finance – are working closely with all our lenders and other stakeholders to finalize the resolution plans, which are expected to be completed by December,” he said at the shareholders meeting, the Economic Times reported.

Launched 15 years ago, Reliance Capital employs about 30,000 people and also has a mutual fund and two insurance units in which Japanese financial major Nippon owns a stake.

Anil Ambani blamed the situation on a combination of factors, including the crisis in the financial services sector, irrational action by auditors and rating agencies and the economic slowdown. Recently CARE Ratings downgraded Reliance Capital’s debt to default, citing delays in coupon payments on several non-convertible debentures.

Last week Japan’s Nippon Life Insurance announced it had completed the acquisition of a 75% stake in Reliance Nippon Life Asset Management from Reliance Capital. Earlier this month, Reliance Capital called off a sale of its general insurance unit to Hero Fincorp after the buyer struggled to raise funds, NDTV Profit reported.

The 60-year-old business tycoon has been struggling to save the remnants of his business empire from collapse after Reliance Communications slipped into insolvency earlier this year. The launch of Reliance Jio, owned by brother Mukesh Ambani, in 2016 had caused widespread disruption in the mobile phone services sector and ironically Reliance Communications was one of the victims.

Since 2015, Anil Ambani, heir to half of his late father Dhirubhai Ambani’s conglomerate, has been seeking to revive his group’s creditworthiness, only to see asset sales fail, further restricting his options for raising cash.

Once a billionaire, his personal fortune has dwindled over the years as his businesses sank under the weight of debt. As of July, four of the biggest group firms, excluding the phone company, had about 939 billion rupees ($13.29 billion) of debt.

In 2006, the two brothers had divided father Dhirubhai Ambani’s business empire. In 2007, Anil Ambani had a net worth of $45 billion, according to the Forbes Rich List, while Mukesh Ambani had a net worth of $49 billion.

In 2018, Mukesh Ambani topped the Forbes India Rich List with $47.3 billion, while Anil had slipped to 66th position with $2.44 billion.

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