Representative image. News18
Torrent Group has become the highest bidder for debt-laden Reliance Capital (RCap) in an electronic auction process held on Wednesday. The company offered Rs 8,640 crore for the venture, according to reports. Hinduja Group was the only other participant in the electronic auction and offered Rs 8,110 crore to RCap's committee of creditors (CoC). The CoC will reportedly study the final details of the resolution plan before finalizing the winning bid today, December 22. Details to be discussed include the cash component offered by Torrent and Hinduja.
While a consortium of Cosmea Financial and Piramal Group withdrew from the electronic auction on Tuesday, Oaktree Capital stayed out of the race on Wednesday, reducing the number of bidders to two.
The Cosmea-Piramal consortium withdrew from the race, saying that changes in the resolution process had made the acquisition of RCap "unfeasible." During the time of binding bid submission, Hinduja had made an offer of Rs 5,060 crore. The offer included an initial payment of Rs 4.1 billion, with a net present value (NPV) offer of Rs 4.8 billion. Torrent had made an offer of Rs 4,500 crore, with an initial payment of Rs 1,100 crore and a NPV of Rs 4,200 crore.
Oaktree Capital had previously hinted that it would drop out of the ongoing resolution process after the CoC did not agree to its requests for additional information. The company sought RCap financial results through December 31, 2022 and requested to extend the electronic auction date to January 31, 2023. The CoC called Oaktree's demands impractical and rejected them. Pursuant to a previous order from the National Company Law Tribunal (NCLT), lenders must complete the RCap resolution process by January 31.
The CoC had called the RCap electronic auction last week after discovering that the initial bids were below the liquidation value. The lenders asked the bidders to change the offer price, otherwise the companies would go into liquidation. The CoC and the bidders agreed to hold the auction, which was held on Wednesday.
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