Ahead of the second auction round scheduled for April 26, Reliance Capital (RCap) lenders will meet today, April 24, to resolve concerns raised by bidders, the sources said. Both the potential bidders, Torrent Investment and Hinduja Group's IndusInd International Holdings Ltd, have expressed multiple reservations about the proposed auction and its terms and conditions.
Both bidders have informed the Creditors Committee that, unless the issues raised by them are resolved, it is unlikely that they will participate in the auction. Both bidders want firmness and no bargaining on value or terms and conditions after the second auction round ends.
The Employees Provident Fund Organization (EPFO) and the LIC, Reliance Capital's two main lenders, oppose providing such a commitment.
In the event that the final bid amount in the second round of the auction is less than the liquidation value of Rs 13,000 crore, both lenders want to leave room for further negotiations. Together, the EPFO โโand the LIC control more than 30% of the voting powers of the COC.
The IIHL has ruled that bidders participating in the auction must agree not to bid outside of the Challenge Mechanism process. Bidders also want the CoC to promise that they will not accept any bids that do not follow the Challenge Mechanism.
Torrent has asked that it be made public after each round how many bidders and how much they are willing to bid in the next round.
The deadline to complete the RCap resolution process has been extended by three months to July 16 by the Mumbai bench of the National Company Law Tribunal (NCLT).
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