Ahead of the 2nd round of auction scheduled on April 26, lenders of Reliance Capital (RCap) will meet today, April 24,to resolve concerns raised by bidders, sources said. Both the potential bidders, Torrent Investment and IndusInd International Holdings Ltd of Hinduja Group, have expressed multiple reservations on the proposed auction and its terms and conditions.
Both the bidders have conveyed to the Committee of Creditors that unless the issues raised by them are resolved, they are unlikely to participate in the auction. Both the bidders want finality, and no negotiation in value or on terms and conditions after the 2nd round of auction is over.
The Employees' Provident Fund Organisation (EPFO) and the LIC, Reliance Capital's two main lenders, are opposed to providing any such commitment.
In the event that the ultimate offer amount in the second round of the auction is less than the liquidation value of Rs 13,000 crore, both lenders want to leave opportunity for future negotiations. Together, the EPFO and the LIC control more than 30% of the COC's voting powers.
The IIHL has ruled that the bidders taking part in the auction must promise not to make an offer outside of the Challenge Mechanism process. Bidders also want the CoC to promise that they won't accept any bids that don't follow the Challenge Mechanism.
Torrent has asked that it be made public after each round how many bidders and how much they are willing to offer in the following round.
The deadline for concluding the resolution process of RCap has been extended by three months to July 16 by the Mumbai bench of the National Company Law Tribunal (NCLT).
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