homebusiness Newscompanies NewsReliance Capital's second auction round concludes, Hinduja Group emerges sole participant
Reliance Capital's second auction round concludes, Hinduja Group emerges sole participant
Hinduja Group’s IIHL has offered Rs 9,650 crore as upfront payment afterTorrent Investment, Okatree, and Piramal Cosmea consortium did not participate in the auction round. As a result, Hinduja was declared the highest bidder.
The second round of auction for debt-ridden Reliance Capital concluded on Wednesday in which Hinduja Group’s IIHL has emerged the sole participant. It offered Rs 9,650 crore as an upfront payment.
It is also noted that Torrent Investment, Oaktree, and Piramal Cosmea consortium did not participate in the auction round. As a result, Hinduja was declared the highest bidder.
The lenders will hold meetings this week to further negotiate and submit proposals to the National Company Law Tribunal (NCLT) subsequently.
The auction, which was earlier scheduled for April 11, was postponed to April 26 after consultation between lenders and suitors. The lenders decided to set the base bid at Rs 9,500 crore on a net present value basis, with a minimum cash component of Rs 8,000 crore, for this round of bidding.
The bid amount will increase by Rs 500 crore after the first round, after which, by Rs 250 crore in subsequent rounds, as per the auction process. This auction is expected to enable Anil Ambani-promoted Reliance Capital reduce its debt burden and get back on a stable financial footing.
On November 29, 2021, the Reserve Bank of India (RBI) took control of the board of Reliance Capital due to payment defaults and governance issues. The RBI appointed Nageswara Rao Y as the administrator for the Corporate Insolvency Resolution Process (CIRP) of the company.
Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two companies were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
The RBI subsequently filed an application for the initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal. In February of the previous year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital.
Also Read: Reliance Industries Q4 Results: Nine of every 10 analysts continue to have buy recommendations
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