Trustee Nageswara Rao Y received 98% of the lenders' votes in favor of a second auction even as the National Court of Company Law (NCLT) will hear on Thursday a request to oppose the new auction presented by Torrent Investmentsa bidder in the fray for the acquisition of the company.
The voting window for the proposed auction closed Tuesday night.
At the center of the dispute is an offer of a Hinduja Group entity given 24 hours after the initial auction deadline (December 21), exceeding the offer made in the time stipulated by Torrent.
While Torrent offered Rs 8,640 crore for the troubled company, Hinduja offered Rs 8,950 crore, including Rs 8,110 crore as down payment.
As both bids are below the liquidation value of Rs 12,500-13,000 crore set by Duff & Phelps and RBSA Advisors, the lenders are proposing a new auction in the hope of getting bids above Rs 12,000 crore, said the people mentioned above.
Meanwhile, the Hinduja group has submitted an interlocutory request to NCLT to be a party to the matter, one of the people said. It will be a closely watched battle, as prominent lead attorneys represent different parties. Harish Salve and Abhishek Manu Singhvi represent the Hinduja group, Kapil Sibal represents the creditors' committee, Ravi Kadam represents the administrator, and Darius Khambata and Vikram Nankani represent Torrent Group.
life Insurance Corporation, yes bank as well as EPFO โโare among Reliance Capital's largest debt holders.
Last Friday, the lenders proposed to hold a second round of auction with a minimum threshold price of Rs 9.5 billion on a Net Present Value (NPV) basis, which would include Rs 8 billion as an upfront cash payment, as reported. ET on January 9. set Rs 6,500 crore as the threshold price in the first round of auction which ended on December 21.
Since this agenda item does not fall into the significant category that requires a 66% voting threshold under the Insolvency and Bankruptcy Code (IBC), the trustee needs 51% in favor to pass the resolution, the people said. cited above.
Lenders will also allow Pyramid Companies Y Cosmea Financial Holdings to participate in the new auction. Cosmea had opted out of the race a day before the auction, stating that the contours of the sale process had been significantly altered.
The trustee has admitted Rs 25,334 crore in claims from secured and unsecured financial creditors.
Reliance Capital, in insolvency proceedings, is home to 20 financial companies ranging from insurance to brokerage.
