Torrent Investments has escalated the legal war over trust capital offer to the Reserve Bank of India (RBI) asking it to instruct the manager.
The Creditors Committee will meet on January 3 to give an opinion on the new turn of the case.
In a new letter to runs batted in Lieutenant Governor M. Rajeshwar Rao dated December 28, Torrent Investments sought directions to reach Nageswara Rao Y, the manager of trust capital.
The letter said that the challenge process was concluded on December 21 with the administrator's email to Torrent Investments confirming its NPV offer of Rs 8640 crore as the highest offer.
However, Torrent Investments was informed that a competitor resolution applicant Hinduja Group had submitted a revised version late
financial proposal on December 22 after completing the challenge process on December 21 and after learning that Torrent Investments had emerged as the highest bidder. According to earlier press reports, Hinduja's offer of Rs 9 billion cash upfront beats Torrent's offer of just Rs 4 billion cash and the balance to be paid to lenders in three equal installments in year 3/4/ 5 with zero interest.
The goal of the IBC Code is to maximize value to creditors. As such, Hinduja's offering is better for execution compared to Torrent as it does not have a requirement to share security as the CoC will care about any current security dilution.
In repeated Supreme Court rulings, it has been held that value maximization is a key factor in the CoC's approval of any plan.
The only resolution made for a financial services company under special powers of runs batted in Section 227 was DHFL, which was won by Piramal Group.
In that case, Adani Group, which was not even a resolution applicant, was admitted by CoC as it offered the highest value to Piramal's offer.
--IANOS
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