Free To Negotiate For Maximising Asset Value, Rcap Lenders Tell NCLAT

Reliance Capital's lenders told the NCLAT appeals court on Monday that there are no barriers to creditors' power to negotiate resolution plans seeking a higher valuation for the stressed asset. The intent of the Insolvency and Bankruptcy Code (IBC) is to maximize the value of assets and the Creditors' Committee is free to negotiate the terms for that, attorney Kapil Sibal said in closing arguments on behalf of the lenders.

Reliance Capital lenders promoted by Anil Ambani had filed with NCLAT (National Company Law Appeals Court) challenging an NCLT order restricting further auctioning of the bankrupt company. The Mumbai court of NCLT (National Company Law Court) on 2 February said that the challenge mechanism for financial offers was concluded on 21 December 2022 with Torrent Investments' offer being Rs 8640 crore. the highest.

Sub-clause (1-A) of IBC Regulation 39 allows lenders to be able to negotiate resolution plans, said Sibal on behalf of Vistra ITCL (India), one of Reliance Capital's creditors. Lead counsel Mukul Rohatgi, representing Torrent Investments, would argue on Tuesday. "Kapil Sibal, Appellant's Lead Counsel, has completed his submission in the Rejoinder," the NCLAT order reads.

An application has been made on behalf of Mukul Rohatgi, lead counsel representing Torrent Investment, as he wanted to add one more filing on behalf of the company. "List these appeals tomorrow, 21.02.2023, for Rohatgi's submission. Appellant's scholar counsel will also be given the opportunity to add the rejoinder, if any," said NCLAT bench consisting of Chairman Ashok Bhushan and Judge Barun Mitra . NCLAT was hearing a statement filed by Vistra ITCL (India), one of the lenders, and group firm Hinduja Indusind International Holdings Ltd (IIHL) against the NCLT order.

Torrent Investments had entered a guilty plea on January 9, asking the court to strike down the lenders' plan to hold a new auction for the RCap acquisition. Later, the Hinduja group firm also filed a petition challenging the NCLT order. Torrent Investment was the highest bidder by offering Rs 8,640 crore in the latest round of the "challenge mechanism". Reliance Capital has consolidated debt of around Rs 40,000 crore.