RCap has been in insolvency since November 29, 2021, when the RBI superseded its board.
The lenders of Reliance Capital (RCap) may extend the deadline for the completion of the debt-laden firm’s resolution process to May end, even as the date for the second round of e-auction remains unchanged. The current deadline to complete the resolution process, which was extended multiple times, ends on April 16.
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“The second e-auction is now slated for April 11, and the deadline to complete the resolution process ends five days later. It would be difficult to wrap up the resolution process within the current deadline, and the decision is to extend it further,” a source close to the development said.
Further, the prospective resolution applicants (bidders) are also seeking an extension to the second e-auction deadline.
“As of now, there is no change in the deadline,” another source said.
The second round of e-auction (or the extended challenge mechanism) was postponed twice in the past due to myriad reasons. The first round of auction was held on December 21, 2022.
The deadline to complete RCap’s resolution plans was also extended multiple times.
Separately, the bidders have also sought clarifications from the committee of creditors (CoC) ahead of the second e-auction.
One of the concerns for the bidders is the compliance of the resolution plans with Insolvency and Bankruptcy Code and Request for Resolution Plan (RFRP) guidelines. During the first e-auction, the lenders had stated that some of the resolution plans were “not compliant” with the IBC.
The applicants also want transparency in the extended challenge mechanism and have suggested setting a separate e-portal, with details of the bidders and the process.
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“They have also sought rescheduling of the second e-auction, till the issues are sorted out,” a source said.
Two bidders – Singapore-based Oaktree Capital and IndusInd International Holdings (IIHL), the firm through which the Hinduja Group had placed bids – had confirmed its participation in the extended challenge mechanism. Torrent Group was “undecided” as there is no clarity on the outcome of the process, as the Supreme Court is yet to give its final order. The apex court is only slated to hear the matter in only August, which is at least five months away.
RCap has been in insolvency since November 29, 2021, when the RBI superseded its board.
Earlier, in March, Torrent Group moved the Supreme Court against National Company Law Appellate Tribunal’s order that permitted holding an extended auction for the debt-laden firm. Vistra ITCL (India), a member of the CoC, was the respondent in the case. The appellate tribunal had permitted holding the second e-auction allowing the lenders’ plea to “maximise value” of debt-laden firm as the bids received were “sub-optimal and unsatisfactory”.
