The interim stay was provided after Torrent Group filed an interlocutory application with NCLT on Monday seeking its direction to RCap’s administrator not to accept Hinduja’s revised bids that were submitted a day after the e-auctions ended
Earlier, Ahmedabad-based Torrent Group submitted a bid of Rs 8,640 crore for acquiring the NBFC firm set up by the Anil Ambani Group.
After the e-auction was over, Hinduja presented a revised resolution plan with a bid of Rs 9,000 crore and it offered 100 per cent cash upfront.
Mumbai:
In a new twist, Torrent Investments Private Limited has got an interim relief in the Reliance Capital(Rcap) bidding case as the National Company Law Tribunal (NCLT) has directed Reliance Capital’s Committee of Creditors (CoC) to reject the revised higher RCap offer from the Hinduja Global.
The interim stay was provided after Torrent Group filed an interlocutory application with NCLT on Monday seeking its direction to RCap’s administrator not to accept Hinduja’s revised bids that were submitted a day after the e-auctions ended.
The Mumbai bench of the bankruptcy court will resume hearing petition on January 12.
The petition by Torrent Group was filed with NCLT on Monday, a day before the crucial Committee of Creditors’ (CoC) meeting to finalise the resolution process and decide the winning bidder.
The move is likely to further delay the insolvency proceedings of the former Anil Ambani group company, as January 31 is the deadline to close the resolution process.
Earlier, Ahmedabad-based Torrent Group submitted a bid of Rs 8,640 crore for acquiring the NBFC firm set up by the Anil Ambani Group.
After the e-auction was over, Hinduja presented a revised resolution plan with a bid of Rs 9,000 crore and it offered 100 per cent cash upfront.
In an e-auction conducted under the Challenge Mechanism, Torrent had presented a resolution plan for Reliance Capital Ltd (RCL) with a net present value of Rs 8,640 crore, while Hinduja’s offer was Rs 8,110 crore.
The CoC fixed a floor value of Rs 6,500 crore for the auction held on December 21.
Meanwhile, Torrent Investments has escalated the legal war for Rcap bid to the Reserve Bank of India (RBI) asking it to issue directions to the administrator.
In a new letter to RBI Deputy Governor M. Rajeshwar Rao dated December 28, Torrent Investments sought directions to Nageswara Rao Y, the administrator of Reliance Capital.
The letter said that the challenge process was concluded on December 21 with the administrator’s email to Torrent Investments confirming its NPV bid amount of Rs 8640 crore as the highest bid amount.
However, Torrent Investments was made aware that a competing resolution applicant Hinduja Group had belatedly submitted a revised financial proposal on December 22 after completion of the challenge process on December 21 and after having learnt that Torrent Investments had emerged as the highest bidder.
The objective of the IBC Code is to maximise value for creditors. As such, the Hinduja bid is best for execution compared to Torrent as it has no requirement of sharing security as the CoC will be concerned with any dilution of current security.
In repeated Supreme Court judgements, it has been held that maximisation of value is a key factor in any plan approval by CoC.
Among 20 companies, Reliance Capital has a wholly owned subsidiary- Reliance General Insurance, and has 51 per cent stake in Reliance Nippon Life Insurance.
As per an order of the National Company Law Tribunal (NCLT), lenders have to complete the resolution process of Reliance Capital by January 31, 2023.