Banks’ meeting to be held today on IIHL’s bid for Reliance Capital
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New Delhi: A decision on the Rs 9,650-crore bid placed by Hinduja group company IIHL in the auction for debt-ridden Reliance Capital Ltd (RCL) will be taken at the lenders’ meeting on Friday. Sources said on Thursday that the committee of creditors will decide on IIHL’s bid in its meeting on Friday. In the second round of auction held on Wednesday, IndusInd International Holdings Limited (IIHL) was the highest bidder.
According to sources, a debt resolution plan may also be placed before the lenders by IIHL. In the second round auction, IIHL was the sole bidder while Torrent Investments and Oaktree of Singapore did not participate in the bidding process. In the first round of auction, Torrent Investments had bid Rs 8,640 crore. The committee of creditors (CoC) of Reliance Capital had fixed a base price of Rs 10,000 crore for the second round of auction. At the same time, the minimum bid for the first round of auction was fixed at Rs 9,500 crore.
Sources said IIHL has offered to pay the entire amount of Rs 9,650 crore in cash. Apart from this, it is also ready to invest Rs 300 crore in Reliance General Insurance and pay Rs 50 crore separately. The second round of auction was held on Wednesday after the Supreme Court allowed re-auction. However, the outcome of the second round of bidding will depend on the final decision of the court. In fact, Torrent, which was the highest bidder in the first round auction, has challenged IIHL in court, alleging that it later made a revised bid.
In the first round of auctions held in December last, IIHL had initially bid Rs 8,110 crore but later revised it to Rs 9,000 crore. The lenders had decided to conduct a second round of auction if the bids were not received as expected. The Reserve Bank had superseded the board of directors of Reliance Capital on November 29, 2021, taking note of payment defaults and serious operational issues. Along with this, Nageswara Rao Y was also appointed as the administrator and entrusted with the task of completing the insolvency process.
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