The Financial Express
The second e-auction for debt-laden Reliance Capital (RCap) has been postponed by a week to April 11 even as one more bidder – Singapore-based Oaktree Capital – has confirmed its participation.
The other resolution applicant in the fray is IndusInd International Holdings (IIHL), the firm through which the Hinduja Group had placed bids. However, Torrent Investments, a group company through which Gujarat-based Torrent Group had placed its bid for the entire assets of RCap, is yet to take a call, sources close to the development said.
“Earlier only one bidder – IIHL – had confirmed its participation in the extended challenge mechanism, while the committee of creditors (CoC) had decided to go ahead with its decision of holding the auction on April 4. Now with one more bidder evincing interest and the resolution applicants seeking more time to participate, it has been decided to provide more time for them to prepare,” one of the sources said.
Torrent Group is still “undecided” as there is no clarity on the outcome of the process. “It is not still clear how the winner could be decided as the Supreme Court is yet to give its final order. The apex court is slated to hear the matter in August, which is at least five months away,” a source said.
Earlier this month, Torrent Group moved the Supreme Court against National Company Law Appellate Tribunal’s order that permitted holding an extended auction for the debt-laden firm. Vistra ITCL (India), a member of the CoC, was the respondent in the case. The appellate tribunal had permitted holding the second e-auction allowing the lenders’ plea to “maximise value” of the debt-laden firm as the bids received were “sub-optimal and unsatisfactory”.
IIHL intends to participate in the extended challenge mechanism even as it intends to maintain the earlier bid amount of Rs 9,000 crore in upfront cash.
“With two bidders in the fray, the prices are also expected to rise, which help the lenders maximise the returns from the insolvency process,” another source said.
The CoC was expecting to garner more than Rs 10,000 crore from the extended challenge mechanism, and participants who had made earnest money deposits (EMD) of Rs 75 crore were eligible to participate. The liquidation value, as per independent valuers, stood at about Rs 13,000 crore.
The CoC wants all the resolution plans to be compliant with the Insolvency and Bankruptcy Code (IBC) and request for resolution plan (RFRP) rules before commencement of the e-auction. This is to avoid further delays as at the time of the earlier auction, which was held on December 21, many of the plans were found to be non-compliant.
The name of the highest bidder in net present value (NPV) terms will be announced post the auction, while the final winner would be selected based on the entire resolution plan, which also includes the bid amount.
RCap has been in insolvency since November 29, 2021, when the RBI superseded its board.
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