The timeline for bidding Reliance Capital Ltd extended by 90 days — from June 3 to September 2, 2022. This is the second extension granted by the Committee of Creditors (CoC) for the completion of RCL’s resolution process
New Delhi:
Lenders of debt-ridden Reliance Capital Ltd (RCL) on Sunday decided to extend the resolution process timeline by another two months to November 2 as there has been a tepid response from bidders for its acquisition.
The deadline for the resolution plan submission has been extended as a few prospective bidders had written to the administrator seeking more time for the submission, sources said.
According to the sources, the timelines for resolution process completion and resolution plan submission have been extended due to the cold response from the bidders.
Out of the around 54 expressions of interest (EoI) received initially, now only a handful of bidders are engaged with the administrator, the sources said, adding lenders had given two options to bidders.
Under the first option, bidders were allowed to acquire RCL along with its eight subsidiaries. Piramal Enterprises, Yes Bank and Torrent Group have opted for this option.
In the second option, bidders could submit resolution plans even for a single subsidiary. For Reliance general insurance, Zurich Insurance has shown interest, while Cholamandalam Group was interested in RCL’s Life Insurance arm.
Though, Zurich based Zurich Insurance, the largest insurer in Switzerland, was keen to set up its operations in India in early 2000, when India had opened up its insurance sector, it had shelved such a plan at that time.
Reliance General Insurance is 100 per cent owned by RCL and if Zurich succeeds in its bidding, it has to look for an Indian partner as foreign players are allowed 74 per cent stake in Indian insurers.
However, in Reliance Nippon Life Insurance, Japanese Nippon Life Insurance hold 49 per cent and any other Indian players can buy out 51 per cent from Reliance Capital.
Piramal Enterprise had asked the deadline to be extended to August 10, while IndusInd Bank had requested to extend the timeline to July 15, the sources said.
The timeline was already extended once by 90 days — from June 3 to September 2, 2022. This is the second extension granted by the Committee of Creditors (CoC) for the completion of RCL’s resolution process.
As per the Insolvency and Bankruptcy Code (IBC) rules, the administrator had to close the resolution of RCL within 180 days — by June 3.
In addition, the CoC also decided to extend the last date for submission of the resolution plan by the prospective bidders from June 20 to July 11.
The Reserve Bank of India (RBI) had on November 29 last year superseded the board of Reliance Capital Ltd (RCL) in view of payment defaults and serious governance issues.
The RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the company.
This is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC recently. The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
The RBI subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal (NCLT).
In February this year, the RBI-appointed administrator invited expressions of interest (EoIs) for the sale of Reliance Capital.