Torrent Investments has offered to the lenders of Reliance Capital Ltd the full amount of the offer of $8,640 crore up front after financial advisers differed on the net present value of the bankrupt company's assets, a person familiar with the development said.
Torrent emerged as the highest bidder in an electronic auction process on December 21.
The group offered a net present value (NPV) offer for $8,640 crores, which included cash in advance of $4,000 crores and the rest $Rs 4,640 crore at zero interest for 3, 4 and 5 years.
One day after the electronic auction, Hindujas revised his bid to $9,000 crores of $8,110 crores. Hindujas, which had come in second place during the auction process, offered an initial cash payment of $8,800 crores.
Challenging this move, Torrent's group approached the National Company Law Court, which asked the lenders to hold the Hinduja group's post-auction bid on hold until the final hearing.
Torrent claimed that Hinduja's revised bid, after the electronic auction, was illegal and did not meet the requirements.
“We have not reviewed the net present value like the Hindujas. We have only converted all NPV to cash upfront because there was a difference of opinion on that," said a person familiar with the matter.
On a NPV basis, Torrent's offer is still less than Hinduja's revised offer of $9,000 crores.
The Torrent group's recent move will strengthen their position after being overtaken by the Hindujas.
The Reliance Capital auction process has been marked by several twists and turns, with two of the leading candidates, Oaktree and the Cosmea-Piramal consortium, pulling out of the race at the last minute.
Reliance Capital is the third major non-bank finance company where the Reserve Bank of India (RBI) has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code, or IBC, along with Srei Group and Dewan Housing Finance Corp. Ltd (DHFL). ). In November 2021, the Reserve Bank referred Reliance Capital for bankruptcy resolution after it defaulted on bonds worth $24,000 crores. Subsequently, Nageswara Rao Y. was appointed as the administrator of the firm's corporate insolvency resolution process.
Reliance Capital is the third major non-bank financial company where the Reserve Bank of India (RBI) has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code, or IBC, along with Srei Group and DHFL. In November 2021, the Reserve Bank referred Reliance Capital for bankruptcy resolution after it defaulted on bonds worth $24,000 crores. Subsequently, Nageswara Rao Y. was appointed as the administrator of the firm's corporate insolvency resolution process.
On Friday, shares of Reliance Capital rose 5% to $10.71.
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