Second round of auction for Reliance Capital deferred till 26 April
The second round of auctions for Reliance Capital has now been deferred to 26 April after the committee of creditors fixed the date in its meeting today. The never-ending resolution process of Reliance Capital is testing the patience of all the stakeholders – lenders as well as resolution applicant.
The second round of the auction was supposed to take place on 11 April 2023, but the lenders wanted to ensure that the resolution plans IBC and Request for Resolution Plan (PFRP) are compliant.
The COC also wanted to ensure that it followed the directions of the Supreme Court in the challenge mechanism. Bidders also wanted certainty that no further negotiations after this extended challenge mechanism.
It is to be mentioned here that the CoC has already extended the date for completion of the resolution process from 16 April to 30 May 2023. But now that the second round of the auction itself has been deferred to 26 April, it is unlikely that the process will be completed by 30 May.
The second round of auction for Reliance Capital has now been postponed for the fourth time.
It must be noted that earlier all the bidders had shown reluctance to go ahead with the second round of auctions. Torrent Investments had conveyed to the lenders that the company was not willing to participate in the second round of auction, and IIHL of Hinduja Group has also told the lenders that it wanted to withdraw its post auction revised bid of Rs 9,000 crores and retain the old offer of Rs 8110 crores made in the first auction held on 21 December.
The first round of auction was held on 21 December 2022. The first round of auction has 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.
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