When Anil Ambani lost his half of the Reliance empire and admitted that he was broke in a UK court, firms such as Reliance Capital and Reliance Entertainment were up for sale to pay off debts. But after delays, multiple extensions and hearings in tribunals and the Supreme Court, Reliance Capital's second auction has come to an end years later.
In the auction cleared by the apex court and the National Company Law Appellate Tribunal, the Hinduja Group has emerged as the biggest bidder.
Why did competitors back out?
At Rs 9,650 crore, the group's company made the winning bid, since the other two contenders Oaktree and Torrent Investments didn't participate in the auction.
Although Torrent had approached the National Company Law Tribunal against the reauction, since it had already won the first one, it had earlier agreed to participate.
During the first bidding process, Torrent had offered Rs 8,640 crore, which was higher than Hinduja's Rs 8,110 crore, for Reliance Capital.
But after Torrent became the top bidder, Hinduja made a higher offer of Rs 9,000 crore, which the former objected to.
End of a deadlock?
Hence the creditors and other participants agreed to another auction, which NCLT blocked and accepted Torrent as the winning bidder before the NCLAT changed the verdict.
During this new auction, the creditors set Rs 9,500 crore as the minimum bid amount, which is higher than Torrent's original offer.
At the same time a requirement for a minimum upfront cash payment was set at Rs 8,000 crore.
As the sole bidder, Hinduja not only offered a price higher than the minimum threshold, but also offered to pay Rs 9,000 crore in cash upfront.
