Owing to slow response from bidders for the acquisition of debt-ridden Reliance Capital, the company’s lenders on Sunday decided to extend the deadline for the resolution process by two months, ending November 2, 2022. This will be the second extension by the committee. of creditors (COC) for resolution of the Anil Ambani-backed company.
Earlier, creditors had extended the deadline by 90 days from September 2, 2022, to June 3. Specifically, the administrator had to shut down. Reliance CapitalResolution within 180 days by June 3 as per the Insolvency and Bankruptcy Code (IBC) rules.
Besides, the creditors also decided to extend the deadline for submission of resolution plans by potential bidders from June 20 to July 11 this year.
Sources told PTI that the deadline for submission of resolution plans has been extended as some potential bidders have written to the administrator seeking more time for submission.
According to sources, Piramal Enterprises had asked to extend the deadline to August 10, while indusind bank There was a demand to extend the deadline to 15 July.
Thus, the sources said that due to cold response from the bidders, the deadline for completion of resolution process and submission of resolution plan has been extended.
Notably, from around 54 EoIs received initially, sources told the news agency that now only a handful of bidders are engaged with the administrator.
He also pointed out that the lenders had given only two options to the bidders. First, bidders were allowed to acquire Reliance Capital along with its eight subsidiaries.
Companies like Piramal Enterprises, Yes Bank and Torrent Group have opted for the first option.
Secondly, bidders can submit resolution plan for a single subsidiary as well.
Under the second option, Zurich Insurance has shown interest in the company’s general insurance cluster, while the Cholamandalam group has shown interest in the life insurance arm.
RBI-appointed Nageswara Rao Y is the administrator of Reliance Capital’s Corporate Insolvency Resolution Process (CIRP).
Reliance Capital has a consolidated debt of around Rs 40,000 crore. RBI had applied to the National Company Law Tribunal (NCLT) Mumbai Bench for initiation of CIRP against the Reliance Group company.
Reliance Capital’s subsidiaries under insolvency resolution are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Securities, Reliance Asset Reconstruction Company, Reliance Home Finance and Reliance Commercial Finance.
Reliance Capital will be the third NBFC against which RBI has recently initiated insolvency proceedings under the IBC. Srei Group NBFC and Dewan Housing Finance Corporation (DHFL) were the other two NBFCs.
Shares of Reliance Capital closed on BSE 12.42 each, an increase of 1.22%.