Torrent Investments had become the highest bidder with its offer of โน8,640 crore on December 21, 2022 for debt-ridden Reliance Capital at the auction held as part of its resolution process. | Photo Credit: Special Arrangement
On January 16, the National Company Law Tribunal (NCLT) division will decide Reliance Capital's proposal challenged by Ahmedabad-based Torrent Investmentswhich was the highest bidder in the first bidding round held on December 21.
In the last hearing on January 12, the bench gave time to the Creditors Committee (CoC), which has voted in favor of carrying out the second round of bidding, to present its response in relation to the legal issues raised by the Torrent Group in Your request.
Also read: NCLT will hear Torrent's statement against the second round of bidding in RCap on January 12
According to the details, the auction was held via the Challenge Mechanism by the CoC on 21 December 2022, with Torrent Investments coming out the winner by trading โน8,640 crore as compared to โน8,110 crore quoted by Hinduja Group, owner of IndusInd Bank. .
However, after the auction, in a move seen by many as a departure from the established rules and auction guidelines, Hinduja increased its bid to around Rs 9000 crore, which is also evident in the Minutes of the CoC meeting on December 23.
Hinduja's revised bid was submitted nearly 24 hours after the bid submission time ended according to CoC records.
The CoC's acceptance of the revised offer submitted after the bidding deadline led to the hitherto highest bidder, Torrent, approaching NCLT, which first granted suspension of consideration of the bid submitted by the Hinduja Group.
After the suspension granted by the NCLT, in accordance with the Minutes of the CoC Meeting held on January 3the CoC debated between two methods for placing a new bid, either through a sealed envelope method or re-auctioning.
the hindu is in exclusive possession of the copies of the Minutes of the CoC Assembly held on December 23, January 3 and January 6.
Click here to read the Minutes of the CoC Meeting held on December 23th, January 3, Y January 6
In their next meeting on January 6the CoC appears to have belatedly found that the outcome of the challenge mechanism launched earlier on December 21 was neither optimal nor satisfactory after NCLT suspended consideration of one of the bidders' revised offer.
The CoC at the meeting on January 6 decided to carry out an expanded challenge mechanism through another electronic auction or what has been reported in the media as a re-auction or second round of auction.
For the second round of bidding, the threshold price was apparently set at โน9.5 billion on a net present value (NPV) basis, which would include โน8 billion as initial cash in the first round.
On Monday, the country's top legal brains such as CoC's Kapil Sibal and Torrent Group's Mukul Rohatgi will discuss the matter before the division's bench.
According to lawyers involved in the NCLT cases, it will be interesting to see whether the division court maintains adherence to the process, which prohibits any acceptance of the revised offer after the deadline or commercial wisdom, an opinion adopted by the CoC. to seek higher income for the lender by conducting another round of bidding.
