MUMBAI: In a fresh turn of events in the ongoing insolvency proceedings of Reliance Capital, Torrent Investments has revised its bid and it is now offering to pay the entire bid amount of Rs 8,640 crore as upfront cash.
Earlier the company was offering Rs 3,750 crore as cash upfront and balance in deferred payment. Torrent’s revised bid is still lower than Hinduja’s revised offer of Rs 9,000 crore on net present value (NPV) basis. The NPV is calculated after discounting the future cash flows.
“Payment of full bid amount as upfront cash is a good news for the lenders. There was a pressure from the lenders for raising cash portion. Also, the late bid from the Hinduja Group has prompted Torrent to change revise its payment terms,” a source told TNIE express.
Torrent had earlier accused Hinduja Group of revising its bid in violation of Challenge Mechanism and got a stay from the Mumbai bench of the National Company Law Tribunal (NCLT) against Hinduja Group’s revised bid for the debt-ridden Reliance Capital. Ahmedabad-based Torrent Group claimed that Hinduja’s revised offer, after the e-auction, is illegal and non-compliant. NCLT has directed the administrator not to present Hinduja Group’s revised offer before the committee of creditors (CoC).
Hinduja Group had revised its Reliance Capital bid price to Rs 9,000 crore on December 23, 2022. It had earlier bid Rs 8,110 crore in the e-auction that was held on December 21, 2022. On December 23, Torrent issued a protest letter to the administrator saying that it would seek legal remedy if lenders considered a belated offer from Hinduja.The lenders are now expected to discuss the revised bid by the Torrent Group next week.
The Reserve Bank of India had on November 29 last year superseded the board of Reliance Capital because of payment defaults and serious governance issues. The RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency resolution process of the firm.
The deadline for the resolution of Reliance Capital has been extended three times so far. In October last year, the National Company Law Tribunal extended the deadline from November 1, 2022, to January 31 this year. According to the Insolvency and Bankruptcy Code (IBC) rules, the administrator had to originally close the resolution of RCL within 180 days, by 3 June last year.
Torrent accused Hinduja of revising bid against rule
Torrent had earlier accused Hinduja Group of revising its bid in violation of Challenge Mechanism and got a stay from the Mumbai bench of the National Company Law Tribunal (NCLT) against Hinduja Group’s revised bid for the debt-ridden Reliance Capital. claimed that Hinduja’s revised offer, after the e-auction, is illegal and non-compliant