The National Company Law Tribunal (NCLT) on Thursday asked the lenders of Reliance Capital (RCL) and its administrator to file a response to the plea filed by Torrent Investments.
Torrent Investments had sought to halt them from holding another auction for the Anil Ambani-promoted firm. The tribunal had earlier declined to give the petitioner any interim relief. After the voting ended on Tuesday, Reliance Capital reportedly decided to extend the first round of auction. They are in favour of holding another round for better price realisation.
Torrent Investments, represented by Mukul Rohatgi, told the Mumbai bench of the NCLT that their bid of Rs 8,640 crore was above the threshold. However, on January 7, the Committee of Creditors (CoC) informed that they want to start a fresh round of auction.
He pointed out that extension of the ‘challenge mechanism’ is not permissible.
After hearing Torrent Investments’ plea, the NCLT bench comprising Pradeep Narhari Deshmukh and Shyam Babu Gautam asked the lenders and the administrator to file a reply by January 16.
Kapil Sibal, who appeared on behalf of the CoC, said the Torrent Investments bid in the third round was ‘suboptimal’ and ‘factually incorrect’ as it was less than the threshold.
He added that the lenders are continuing with the process to maximise value, while maintaining that Torrent’sproposition that the bid was closed after the third round was wrong as the CoC had said it is in the process of evaluation.
Under the first ‘challenge mechanism’, the threshold bids amounted to Rs 6,500 crore, while the highest net present value (NPV) offered by applicants was Rs 7,210 crore.
By the time of the second round, the threshold went upto Rs 7,500 crore, and the highest NPV was Rs 7,620 crore. In the third round, the threshold was Rs 8,500 crore, while the highest NPV was Rs 8,550 crore. However, by the end of the fourth round, the threshold, which was Rs 9,000 crore, received the highest NPV of Rs 8,640 crore.