Reliance Capital auction: Bidders start pulling out

This could even mean Reliance Capital might go for liquidation. The latest developments come as a big setback for the lenders who were hoping to maximise the realisation from the insolvency process.

Published: 27th March 2023 09:16 AM  |   Last Updated: 27th March 2023 09:16 AM   |  A+A-

Anil Ambani

Reliance Capital Chairman Anil Ambani. (File| PTI)

By Express News Service

NEW DELHI: All efforts of the lenders to maximise the realisation from the corporate insolvency resolution process of Reliance Capital might come to a naught as bidders have started pulling out of the bidding process. This could even mean Reliance Capital might go for liquidation.

Sources told TNIE that two main bidders Torrent Investments and IIHL of Hinduja Group have expressed inability to go ahead with the second round of auction. Torrent Investments has conveyed to the lenders that the company is not willing to participate in the second round of auction, while Hinduja Group has also said it wants to withdraw its post-auction revised bid of R9,000 crore and retain the old offer of R8,110 crore made in the first auction held on 21 December 2022.

Other bidders -- Cosmea Financial and Piramal -- have written to the Administrator seeking refund of their Earnest Money Deposit (EMD) of R75 crore each, as both the companies do not wish to further participate in the ongoing resolution process. 

The latest developments come as a big setback for the lenders who were hoping to maximise the realisation from the insolvency process by conducting a second round of auction, with a base price of R9,500 crore. Sources said if lenders and bidders fail to reach a workable solution to end the stalemate, Reliance Capital might go for liquidation. Only recently the Supreme Court gave a go-ahead to the lenders for the second round of auctions.

Torrent Investments, which emerged as the highest bidder in the first round of auction on 21 December with a bid of R 8,640 crore had opposed the second round of auction. Two independent valuers -- RBSA and Duff & Phelps -- have pegged the liquidation value of Reliance Capital at R13,000 crore, which is higher than the Torrent’s highest bid of R8,640 crore.

Hinduja Group, which was the second highest bidder in the first round, had revised its bid after the auctions and offered to pay R9,000 crore in upfront cash. Torrent opposed the IIHL’s post-auction revised bid of R9,000 crore as invalid, and challenged IIHL’s revised bid and the second round of auction as well in the NCLT.

According to bankers involved in the process, Torrent in the CoC meeting held on 25 March suggested conducting a Swiss Challenge auction with their earlier bid of R8,640 crore as the threshold. If lenders agree to this, Torrent will have the first right to match any counter offer from IIHL of Hinduja Group, the source said.



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