Lenders approve second auction for Reliance Capital
MUMBAI: Voting on the expected lines, the lenders on Tuesday unanimously decided in favour of the proposal to hold the second round of e-auction for Reliance Capital. With the approval of second round of auction, the earlier bids of Torrent and Hinduja are no longer valid.
“The outcome of the voting is on expected lines as it allow lenders to get a better offer for Reliance Capital. The decision of the Committee of Creditors (CoC) has also paved the way for entry of other two bidders, Piramal-Cosmea and Oaktree, to enter the fray,” said a source. “Proposal to conduct a second Challenge Mechanism round approved with an overwhelming 100% vote by the lenders, led by LIC and EPFO, who have 35% voting rights,” he added.
Apart from Torrent Group and Hinduja Group, now Piramal-Cosmea and Oaktree are also eligible to participate in the bidding for Anil Ambani’s insolvent Reliance Capital. The lenders have set Rs 9,500 crore as base bid for the second of e-auction, including a minimum cash offer of Rs 8,000 crore.
In the first round of the auction that ended on December 21, Torrent Investments gave the highest offer of Rs 8,640 crore based on NPV. After the deadline for the auction passed, Hinduja Group revised its bid price to Rs 9,000 crore on December 23, from its previous bid of Rs 8,110 crore.
Ahmedabad-based Torrent Group claimed that Hinduja’s revised offer, after the e-auction, is illegal and non-compliant. Torrent accused Hinduja of revising its bid in violation of Challenge Mechanism and got a stay from the Mumbai bench of the National Company Law Tribunal (NCLT). NCLT has directed the administrator not to present Hinduja’s revised offer before the CoC. The tribunal will give its order on Thursday.