The Mumbai-bench of National Company Law Tribunal (NCLT) has extended the deadline for completing the resolution process of Reliance Capital by three months to July 16 as lenders have agreed to hold a second round of auction to maximise their recovery.
The earlier deadline of April 16 has already ended.
The 90 days deadline extension was necessitated as the lenders decided to hold a second round of auction on April 26 in order to maximise the recovery from the sale of Reliance Capital assets, sources said.
According to the sources, the bidders who have confirmed their participation in the second round of auction are IndusInd International Holdings Ltd (IIHL) of Hinduja Group, Torrent Investment and Singapore-based Oaktree.
Earlier the second round of auction was scheduled for April 11, but it was postponed for April 26 as the lenders need time to sort out the issues raised by the bidders.
The bidders have asked the Reliance Capital lenders to ensure that the resolution plans should be in compliance to the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP), sources said.
Bidders also want certainty from the lenders that there will not be further negotiations after the completion of the second round of auction, and the resolution process would attain finality after the culmination of the second round, sources said.
In the first round of the auction, the Hinduja Group firm submitted the bid post-auction date.
This post-auction bidding is being contested by Torrent Investment in the Supreme Court as it was the highest bidder.
The Committee of Creditors (CoC) also has to incorporate the Supreme Court order in the Challenge Mechanism, the sources added.
Meanwhile, the administrator has also moved the NCLT for the extension of the deadline for completion of the resolution process to May 30.
The deadline to complete the resolution process of Reliance Capital has been extended multiple times in the past.
The Reserve Bank of India (RBI) on November 29, 2021, superseded the board of Reliance Capital in view of payment defaults and serious governance issues.
The 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 NCLT.
In February last year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital.
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