Mumbai: The race to acquire Anil Ambani’s Reliance Capital was re-energised with Hinduja Group topping Torrent Investments’ latest bid of Rs 8,640 crore with a higher offer of Rs 9,400. The bid submitted after the e-auction process ended on Wednesday has been contested by Torrent Investments, which emerged as the top bidder by the auction deadline.
“One of the resolution applicants, in utter disregard to the sanctity of the challenge process, has sought to revise the bid amount quoted by it during the challenge mechanism process, in an attempt to illegally enhance its bid amount beyond the permissible time period,” it said in a note. “This is in clear violation of the challenge process note,” it added.
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According to reports, Torrent Investments is likely to take the legal route if the Hinduja bid is accepted by the Committee of Creditors (CoC). The company has already fired a missive to administrator Nageswara Rao, protesting the attempt to “overrun the bidding process”.
Hinduja Group after making an earlier bid of Rs 8,110 crore and having exited the bidding process, raised the offer to Rs 9,400 crore after the cut-off. All auction participants submitted their bids by Thursday. The CoC opened the bids on Friday at a meeting.
Lenders will now take a call on whether they will accept Hinduja’s renewed bid, submitted after the process officially ended on Wednesday.
Hinduja’s new offer includes an Rs 8,800 crore payment for Reliance Capital’s core investment company that owns 20 entities ranging from insurance to broking, according to a report in Economic Times.
The revised Hinduja bid was still lower than the minimum liquidation value of Rs 13,000 crore, but translated into a recovery of 37% against 35% from Torrent Investments’ offer.
Kroll and Druff, the two companies appointed by insolvency administrators to value the company, estimated the liquidation value in the range of Rs 12,500 to Rs 13,000 crore.
Reliance Capital auction proceedings
The Anil Dhirubhai Ambani group-owned R Cap was admitted to the debt resolution process in November 2020 after it defaulted on a loan worth Rs 24,000 crore. In November last year, the Reserve Bank of India superseded the board of the default-hit Reliance Capital and appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the company.
RBI subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal (NCLT). Earlier in February this year, the RBI-appointed administrator invited expressions of interest (EoIs) for the auction.
In September, RCL in its annual general meeting (AGM) informed shareholders that the company’s consolidated debt stood at Rs 40,000 crore. It also reported a narrowing of its consolidated net loss to Rs 1,759 crore in the December 2021-ended quarter.
The company had posted a net loss of Rs 3,966 crore in the same quarter a year ago. However, losses widened from Rs 1,156 crore in the preceding September quarter. The total income of the company stood at Rs 4,083 crore in Q3FY22, down from Rs 4,890 crore in Q3FY21. RCL was incorporated on March 5, 1986 and is registered as a Non-Banking Financial Company Core Investment Company (CIC)-Non-Deposit Taking Systemically Important (NBFC-CIC-ND-SI) under the Reserve Bank of India Act, 1934.
