New Delhi, Apr 7: Lenders of debt-ridden Reliance Capital (RCap) may consider extending the deadline for completing the resolution process till May 30 this year, sources said.
The current deadline ends on April 16.
Considering the fact that the second round of auction is yet to take place, it is not possible to wrap up the resolution process within the current deadline.
Earlier this week, lenders postponed the second auction to April 11.
The deadline to complete the resolution process of RCap has been extended multiple times in the past.
On the other hand, sources said, all the three bidders– IndusInd International Holdings Ltd (IIHL) of Hinduja Group; Torrent Investment and Singapore-based Oaktree — who will be participating in the extended challenge mechanism (second round of auction), are still engaged with the Committee of Creditors (CoC) on certain issues or concerns raised by them.
The major concern of the bidders is compliance of resolution plans as per the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP) guidelines, as in the first round of auction, bid by the Hinduja Group firm was submitted post auction.
This bidding post auction date is being contested by Torrent Investment in the Supreme Court as it was the highest bidder as per the auction.
Therefore, sources said, this time bidders want compliance of resolution plans as per IBC and RFRP guidelines, before going in for the second round of auction.
Suitors are also seeking more transparency from the CoC in the extended challenge mechanism and have demanded that a separate e-portal be created on the extended challenge mechanism.
Sources have indicated that the second round of auction, scheduled for April 11, is likely to be postponed by another week, till all the issues raised by the bidders are resolved to their satisfaction.
The second round of auction for Reliance Capital has been postponed twice in the past due to litigation. The first round of auction was held on December 21, 2022.
Earlier, a dispute around RCap’s bidding arose when Hindujas offered to pay Rs 9,000 crore in upfront cash to the lenders, a day after the first round of auction concluded on December 21.
After this, lenders decided to go for one more round of auction to maximise their recovery from the RCap assets.
The Reserve Bank of India (RBI) on November 29, 2021, superseded the board of RCap in view of payment defaults and serious governance issues. RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm.
Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under IBC.
The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). The central bank subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal. (PTI)
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