the mumbai National Court of Company Law is scheduled to listen to the torrent petition today.
Torrent Investments has stated that NCLT should instruct the administrator, Nageswara Rao Y, not to ask lenders to vote on the proposed second auction.
Last Friday, the lenders proposed to hold a second round of auction with a minimum threshold price of Rs 9500 crore on the basis of net present value which would include Rs 8000 crore as advance cash payment, as
reported via ET on January 9. The administrator had planned to invite lenders to vote on this proposal this week.
Torrent believes that the second round of the auction will give the Hinduja Group entity, also a bidder for the financial services company, an opportunity to present an improved offer on them.
Lenders have proposed a second round of auctions, hoping to get better offers, at least above liquidation value. All of Reliance Capital's offerings have been well below the liquidation value of โน12,500-13,000 crore.
In the first round of the auction which ended on December 21, Torrent Investments had made the highest bid of Rs 8,640 crore based on NPV, which it arrived at after discounting future cash flows. Hinduja had offered Rs 8110 crore in a GO basis, while Pyramid Companies -The Cosmea Financial Holdings team, which was also a race, did not participate in the auction. One day after the auction, Hinduja submitted a revised and improved offer of Rs 9,000 crore, including Rs 8,750 crore as down payment.
Torrent Investments sent a protest note to manager Nageswara Rao Y stating that Hinduja's revised offer violated the terms of the auction. Torrent subsequently moved to the National Company Law Tribunal (NCLT), requesting that the servicer be prevented from presenting Hinduja's enhanced offer to lenders because it did not comply with the rules.
On January 3, the NCLT
managed the administrator only to consider the plans that were in line with the rules. The administrator said that he would appeal the order to the NCLT.
