Reliance Capital lenders to meet today; IIHL to present its resolution plan
So, what is next in the Reliance Capital insolvency proceedings after the Hinduja Group firm IIHL made the winning bid of Rs 9,650 crore in the second round of auctions?
After the conclusion of the second round of auction on Wednesday, the Committee of Creditors (COC) of Reliance Capital is scheduled to meet on 28 April 2023.
IIHL will make a presentation to the lenders on its resolution plan. IIHL was the sole bidder in the second round of auction of Reliance Capital, as Torrent Investment and Oaktree decided to stay away from the auction.
In addition to the Rs 9650-crore bid, the IIHL has also offered Rs 300 crores capital infusion into the Reliance General Insurance, and another Rs 50 crores for future recovery from preferential, undervalued, fraudulent and extortionate (PUFE) transactions. This takes the total value of IIHL’s bid to Rs. 10,000 crores. The entire bid amount will be paid upfront in cash.
The amount quoted by IIHL in the second bid is Rs 1900 crore more than its own bid of Rs 8110 crores in the first Challenge Mechanism held in December 2022. Compared to Torrent’s highest bid of Rs. 8640 crores in the first challenge mechanism, the new bid of IIHL is higher by Rs 1380 crores.
The CoC will have to approve the resolution plan, before the administrator send it to the NCLT for its final approval.
It must be mentioned here that the lenders were expecting the bid amount to be closer to the liquidation value of Rs 13,000 crore. However, given the fact that only one bidder participated in the second round, the lenders might settle with whatever IIHL is offering.
The CIRP process has already crossed the mandated period on 16 April and the Mumbai bench of the NCLT has already given a three-month extension to complete the process by 16 July 2023.
Also see: Hindujas emerge highest bidder with Rs 9,650 crore bid for Reliance Capital
