Reliance Capital (RCap) has postponed its second auction to April 11, 2023, following the confirmation of three suitors for participation, including IndusInd International Holdings Ltd (IIHL) of the Hinduja Group, Torrent Investment, and Singapore-based Oaktree. The lenders of RCap had initially set April 4 as the date for the second auction, but the date was rescheduled after the additional bidders expressed interest.
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The Committee of Creditors (CoC) decided to establish the base bid at Rs 9,500 crore on a Net Present Value basis, with a minimum cash component of Rs 8,000 crore for the new bidding round. The Supreme Court has fixed the next hearing date for RCap’s case in August, but it has allowed the lenders to proceed with further actions according to the National Company Law Appellate Tribunal’s order.
The bidders have requested that their resolution plans comply with the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP), following the non-compliant plans submitted in the earlier auction held on December 21. To ensure value maximisation for lenders and transparency in the bidding process, the CoC has agreed not to consider bids outside of the auction.
The dispute around RCap’s bidding arose when Hindujas offered to pay Rs 9,000 crore in upfront cash to the lenders, a day after the first auction concluded on December 21. After this, lenders decided to go for one more round of auction to maximise their recovery from the RCAP assets.
The Reserve Bank of India (RBI) superseded the board of Reliance Capital on November 29, 2021, due to payment defaults and serious governance issues. The RBI appointed an administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm. Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC.
