Torrent bank guarantee for RCap to be released – Industry News

The bank guarantees of the Torrent Group, presented as a guarantee deposit (EMD) for the resolution process of Reliance Capital (RCap), are required to be released, while the pending petition before the Supreme Court continues to be processed.

“Bank guarantees given in lieu of EMD must be released within 14 days to the National Company Law Tribunal (NCLT) final approval of the resolution process. Torrent has started talks for the release of bank guarantees, which is expected soon,” a source close to the matter told FE. Bank guarantees were in lieu of Rs 75 crore in EMD.

Since the court approved the process in February, bank guarantees of all bidders are expected to be released soon. However, the petition filed with the Supreme Court The challenge to the second round of electronic auctions will continue, the source added.

Another source said the committee of creditors (CoC) of RCap will request a legal opinion before releasing the bank guarantees.

On February 27, the Mumbai bench of the NCLT approved the resolution plan filed by Hinduja Group firm IndusInd International Holdings (IIHL). However, the company needs other regulatory approvals, including those from the Securities and Exchange Board. IndiaReserve Bank of India and the Insurance Regulatory and Development Authority of India, among others, and the conclusion of a pending suit before the Supreme Court before it could take over RCap's assets.

In June 2023, RCap lenders approved a resolution plan submitted by the Mauritius-registered IIHL with a whopping 99.6% of the total votes voted in its favour.

However, an 'urgency letter' petition submitted by Torrent Investments, a Torrent Group company, on October 3, 2023, requesting the intervention of the Supreme Court for an "urgent hearing and final disposition of all pending resources". The company, a bidder in the first round of auctions, had also challenged the second round of auctions called for the sale of RCap's assets.

The first round of the auction ran into a legal tangle after IIHL made a cash bid of Rs 9,000 crore, which was challenged by Torrent before the NCLT. Torrent later revised its bid to Rs 8.64 billion by offering the full amount in cash upfront, up from Rs 3.75 billion offered earlier in the auction.