The stage is set for the second round of auction due to the bankruptcy of Reliance Capital assets on March 20, even as the Torrent Group plans to move to the Supreme Court against another auction. The second auction it will be held with Rs 8,000 crore as a minimum cash amount up front for bidders to put on the table.
Potential bidders like Hinduja group and Torrent will be required to provide a minimum cash amount upfront of Rs. 8,000 crores to participate in the auction.
While the minimum bid amount for the first round was set at Rs 9.5 billion, the second round would require a bid of Rs 10 000 crore, with an additional Rs 250 crore for subsequent rounds.
The auction takes place after the National Chamber of Appeals in Company Law ordered a second round to obtain the maximum value for the assets. In the first auction held in December, the Torrent group emerged as the highest bidder with Rs 8,640 million. The Hinduja group offered Rs 9000 crore after the auction, prompting the lenders to plan a second round of auction. Torrent had opposed the second auction and had moved the courthouse in January.
According to the new bidding rules, each bidder will be allocated 30 minutes to bid in each round, and the round will be closed if all participating bidders submit bids before the 30 minutes are up. The administrator, following the instructions of the CoC, will announce the closure of each round, with an interval of 30 minutes between each round.
Bidders must present their economic proposal. The lenders clarified that all payments to creditors (excluding any principal offered to creditors) would form part of the net present value (NPV) through either cash advance payment or deferred payment.
In the event that multiple financial proposals are received from any bidder during any round, the financial proposal with the highest NPV will be considered.
