MUMBAI: In a positive development for the lenders of Reliance Capital, the three bidders have agreed to participate in the second round of auction for Reliance Capital, which has now been rescheduled for April 11 from April 4.
Earlier there was only one bidder, IIHL who had confirmed its participation in the auction, but now with Torrent & Oaktree also onboard, the lenders have decided to give the bidders more time for preparation,
as the competition has gone up.
“Committee of Creditors (COC) has also assured the bidders to consider their request that no bids outside the auction shall be considered. This will ensure value maximisation for the lenders and transparency in the bidding process,” said a source. “Highest bidder in value (NPV terms) will be declared post auction to bring finality to the resolution process,” he added.
All the bidders have asked for the resolution plans to be compliant to the the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP), as in the earlier auction held on 21 December, the bidders plans were found to be non-compliant.
Earlier, on March 27, lenders of Reliance Capital announced to hold the second auction on April 4. The base bid amount has been set at Rs 9,500 crore, based on net present value (NPV) calculations, with a minimum cash share of Rs 8,000 crore.
As per the auction process, after the first round, the bid amount will increase by Rs 500 crore, and then by Rs 250 crore in subsequent rounds. It is hoped that this auction will enable Anil Ambani-promoted Reliance Capital to reduce its debt burden and get back on a stable financial footing.
The lenders of Reliance Capital have estimated the liquidation value of the company to be nearly Rs 12,500 crore. On March 2, the National Company Law Appellate Tribunal (NCLAT) allowed a petition filed by RCap lenders seeking another round of auction for the ongoing insolvency process.