NCLT gives 3 more months to complete Reliance Capital insolvency process
The Mumbai bench of the National Company Law Tribunal (NCLT) has extended the deadline for completing the resolution process of Reliance Capital by three months to July 16. The earlier deadline was April 16.
The Committee of Creditors (CoC) of Reliance Capital had earlier decided to extend the date for completion of the resolution process from 16 April to 30 May 2023 after it decided to hold the second round of auction for the sale of assets of the company on April 26.
The three-month extension was necessary as with the second round of auction taking place on April 26, it was unlikely that the process would get completed by 30 May. The second round of auction for Reliance Capital has already been postponed for four times.
The first round of auction was held on 21 December 2022. The first round of auction witnessed both, Hindujas and Torrent, trying to outbid each other by continuously sweetening their bids and offering more upfront cash, even after the auction got over.
However, Torrent’s all cash bid of Rs. 8640 crores and IIHL bid of Rs. 8110 crores were far below the liquidation value and fair value fixed by the independent valuers. The Liquidation Value of Reliance Capital is pegged at around Rs 13,000 crores and Fair Value is Rs 17,000 crores.
Low bids in the first round of auction forced the committee of creditors to hold another round of auctions. However, Torrent Investments, which emerged as the highest bidder, moved NCLT against holding second round of auctions. The NCLT asked the CoC to not go ahead with the second round of the auctions.
Creditors of the Reliance Capital had moved NCLAT against the NCLT order, which reversed the latter’s order. Torrent then moved Supreme Court against NCLAT order, but its petition to stop the lenders from holding the second round of auction was rejected by the apex court.
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