Days after getting interim relief from the bankruptcy court, Torrent Group revised its proposal from Reliance Capital (RCap) with an offer to pay the full offer amount of Rs 8,640 crore in cash upfront.
This is a surprise since Torrent, which had previously been called Hinduja GroupThe revised offer of a "gross and wanton violation" of the challenge process, has now revised its offer.
The move is likely to further delay the insolvency proceedings of the former Anil Ambani group company. January 31 is the current deadline to complete the resolution process.
Gujarat-based Torrent had previously made an offer of Rs 8,640 crore through a group company, Torrent Investments, to acquire all of RCap's debt-laden assets. Earlier, the group had offered to pay Rs 3,750 crore in cash upfront and the balance in installments, or deferred payment mode, sources close to the development said.
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โTorrentHinduja Group's revised offer is still lower than Hinduja Group's revised offer of Rs 9,000 crore on a net present value (NPV) basis, and this is unlikely to change the pecking order. Hinduja's offer remains the highest with its initial cash offer of Rs 8,800 crore," one of the sources noted.
Torrent's previous offer included deferred payment from two to five years and did not have the corporate guarantee that the group had offered in the first round without interest. Torrent also wanted the CoC to allow it to raise funds against RCap assets for deferred funding. The financial advisers to the process, Deloitte and KPMG, had stated that Torrent's initial cash was only Rs 3,750 crore.
As the challenge mechanism for the bidding process ended in December, Torrent's bid was the highest, but Hinduja Group revised its offer with an initial cash component of Rs 8.8 billion. The renewed offer, which was made through a group company IndusInd International Holdings (IIHL), came after the electronic auctions ended.
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Torrent, in a communication to the RCap administrator and the CoC, said there were no provisions for accepting a non-compliant revised bid submission and that the revised bid was "patently illegal." This also vitiates the whole process, he had said to himself.
Torrent also called the revised tender a "gross and arbitrary violation" of the challenge process and later filed an interlocutory application with the Mumbai court of the National Company Law Tribunal (NCLT). The company sought the bankruptcy court to order RCap's lenders not to accept Hinduja Group's revised offer.
On January 3, providing interim relief to Torrent, NCLT suspended the resolution process and sent the case for hearing again on January 12. The court had also asked the administrator to file a response to Torrent's petition.
Following the order, the CoC has sought time to move the National Company Law Appeals Tribunal (NCLAT). The CoC also plans to file an extension request with the NCLT to postpone the timeline of the resolution process from the current January 31 to February 15.
