Lenders to go for Rel Cap auction


MUMBAI : Reliance Capital’s committee of creditors have decided to hold an auction to determine the final bidders under the ongoing resolution process, said two officials familiar with the matter. The CoC will meet again on Friday to discuss auction modalities and set a timeline for the process.

“This will be an auction process with price discovery. The bidders will have to submit new bids and outbid each other. Once the best offer is there, we will see whether it is an acceptable offer,” said one of the officials, and who was also part of the CoC meeting on Tuesday.

The meeting comes after bidders for Reliance Capital (RCap) and its units sought greater clarity on the bidding process before raising their offers.

The creditors, meanwhile, want the bidders to raise their bids first or expect the companies to go into liquidation.

The administrator of RCap had received 4 bids for the whole business – Piramal-Cosmea Financial offered the highest bid at 5,231 crore, followed by the Hinduja group at 5,060 crore, Ahmedabad-based Torrent at 4,500 crore and Oaktree at 4,200 crore.

Another three bids were made for the rest of the businesses, such as Reliance Securities, an asset reconstruction firm and the real estate assets of RCap.

However, the creditors are disappointed that the bids came in far below the liquidation value of RCap and its units. According to estimates submitted by valuers, Duff and Phelps arrived at a liquidation value of 12,500 crore, while RBSA pegged it at 13,200 crore.

In November 2021, RBI referred RCap for bankruptcy resolution after it defaulted on bonds worth 24,000 crore.

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