regular-article-logo Wednesday, 31 May 2023

Auction date for Reliance Capital undecided

Auction will, however, be subject to the final orders of Supreme Court

Our Special Correspondent Mumbai Published 22.03.23, 01:20 AM
Representational image.

Representational image. File picture

The lenders of Reliance Capital (RelCap) on Tuesday held a meeting on conducting the second round of auction for the Anil Ambani-promoted firm.

There are speculations that it may be held towards the end of this month.


The meeting came after the Supreme Court declined to grant a stay on the National Company Law Appellate Tribunal (NCLAT) order which had permitted the creditors to hold the extended challenge mechanism or second round of auction for the sale of the debt-ridden financial services company.

The auction would, however, be subject to the final orders of the top court.

Earlier this month, a two-member bench of the NCLAT also said lenders of Reliance Capital had the power to negotiate and call for a higher bid. In doing so, it had overturned an order of the Mumbai bench of the National Company Law Tribunal (NCLT) that had declared the extended challenge round illegal.

The NCLAT had also ruled that the Committee of Creditors (CoC) can renegotiate the bid.

On February 2, the NCLThad said the challenge mechanism for financial bids stood concluded as on December 21, 2022, with the bid of Torrent Investments atRs 8,640 crore being the highest.

However, the lenders which had decided to go for an extended challenge mechanism appealed against the order before the NCLAT.

Torrent had approached the NCLT on January 9, requesting it to quash the lenders’ plan to hold a fresh auction.

As per the rules of the extended challenge mechanism, the minimum threshold or the bid starting value has been pegged at Rs 9,500 crore, with the subsequent round rising to Rs 10,000 crore and byRs 250 crore in any round that follows.

This compares the minimum threshold value of Rs6,500 crore in the first roundthat concluded on December 21.

The extended challenge mechanism will also have a threshold of a minimum cash upfront payment of Rs 8,000 crore for the bidders, sources said.

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