Lenders of Anil Ambani's Reliance Capital reject bids, opt for liquidation

According to sources, the decision to reject the bids had been taken as the lenders are of the opinion that the bid value offered by all the bidders is too low.

IANSUpdated: Wednesday, November 30, 2022, 06:08 PM IST
article-image
Anil Ambani | File Photo

The Committee of Creditors (COC) of Reliance Capital (RCAP), in its meeting held on Wednesday, has decided to reject all the binding bids that it received from the bidders on Monday.

The COC is now considering sending Reliance Capital to liquidation, under the newly introduced regulation 6(A) of the IBC, whereby each individual business can be sold separately.

According to sources, the decision to reject the bids had been taken as the lenders are of the opinion that the bid value offered by all the bidders is too low.

For the financial services business, RBI has special powers under section 227 of the IBC to refer companies to insolvency for debt resolution. Reliance Capital was the third financial services company that had been referred by the RBI for insolvency.

The other two are DHFL and SREI.

DHFL was sold to Piramal at 50 per cent of its liquidation value, while SREI's resolution process is still in progress.

The rejection of the Reliance Capital bids proves that the use of section 227 by the RBI has not worked in favour of lenders of the financial services companies.

Notably, Reliance Capital has received 5 bids under option 1 for the Reliance Capital Core Investment Company (CIC), as the deadline to submit binding bids ended on Monday 28 November.

The option 1 bidders are Hinduja, Torrent, Oaktree, Cosmea Financial and Piramal consortium, and UAVRCL. Out of these five bidders, UVARCL has bid on a fee basis, which means that it has not submitted any resolution plan for RCAP. It will further sell RCAP assets and make payments to lenders, as and when the sale happens.

No separate bids were received for Reliance General Insurance Company (RGIC) and Reliance Nippon Life Insurance Company (RNLIC)

Cosmea-Piramal has offered Rs 5,231 crore for RCAP, while Hinduja's bid is Rs 5,060 crore.

The size of Torrent and Oaktree's bid is Rs 4,500 crore and Rs 4,200 crore, respectively.

Out of these four, the Cosmea-Piramal consortium has offered Rs 4,250 crore as the upfront payment, while Hinduja offered Rs 4,100 crore upfront to the lenders.

The upfront payment by Torrent and Oaktree is in the range of Rs 1,000 crore.

(If you have a story in and around Mumbai, you have our ears, be a citizen journalist and send us your story here. )

(To receive our E-paper on WhatsApp daily, please click here.  To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Earnings 2023 LIVE: Indigo net profit jumps to Rs 1,422.61 cr; Paytm's losses narrow down to Rs...

Earnings 2023 LIVE: Indigo net profit jumps to Rs 1,422.61 cr; Paytm's losses narrow down to Rs...

Jio announces launch of True 5G in Haridwar

Jio announces launch of True 5G in Haridwar

Paytm buys back 1,46,70,146 equity shares of face value of Re 1 each

Paytm buys back 1,46,70,146 equity shares of face value of Re 1 each

Centre raises windfall gains tax on crude, diesel and ATF; Here's what you should know

Centre raises windfall gains tax on crude, diesel and ATF; Here's what you should know

L&T announces allotment of 72,347 shares

L&T announces allotment of 72,347 shares