Saturday, July 13, 2024

RCap lenders delay auction to get more bidders on board

MUMBAI : The second auction of Reliance Capital Ltd’s assets has been delayed by a week by its lenders as they seek to enlist the participation of more bidders in the process, according to two people familiar with the matter.

The auction has been postponed from 4 April to 11 April, the people said.

Indusind Holdings of Hinduja Group, Torrent Investments and Oaktree Capital have informed lenders that they will participate in the auction, the officials said, requesting anonymity. Only the Piramal-Cosmea Financial consortium has not responded yet.

The bidders have sought more time to complete the compliance process.

In the second auction, the base price was set at 9,500 crore, higher than the previous bids.

“The auction has been postponed to make the bidders’ plans compliant to the request for resolution plan (RFRP),” one of the officials said.

Emails to spokespeople for Torrent Investments, Hinduja Group and Oaktree went unanswered.

Torrent Investments, on the other hand, is yet to decide whether to return to the bidding process, according to a person close to the group.

Lenders decided last week to conduct a second auction in accordance with a Supreme Court ruling on a plea filed by the Torrent Group.

As a result of the National Company Law Appellate Tribunal (NCLAT) permitting lenders to petition for a second auction of Reliance Capital, the debt-ridden firm is currently undergoing insolvency proceedings.

The appellate tribunal permitted the Committee of Creditors to invite bids and continue with the challenge mechanism.

However, the outcome of the second round of auction remains uncertain, given the bidders’ previous behaviour.

In the first round, the Hinduja Group submitted a revised bid of 9,000 crore on 21 December, a day after the first round of auction concluded—in which rival Torrent Group had been declared the highest bidder.

Torrent had bid for 8,640 crore, while the Hinduja Group had originally offered 8,110 crore.

Challenging this, Torrent approached the National Company Law Tribunal, which asked the lenders to keep the Hinduja Group’s post-auction offer on hold till a final hearing.

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