The committee of creditors (CoC) of Reliance Capital has postponed the extended challenge mechanism by a week to April 11 following a request by Torrent Investments and the Hinduja Group seeking more time for the auction, sources told businessline.
The second auction was earlier scheduled to be held on April 4.
Other than the two participants who have sought an extension, the CoC has extended an invite to the other two initial participants--Oaktree Capital and Cosmea Financial in collaboration with Piramal Capital.
“We’re expecting Oaktree to participate, we don’t know about Cosmea,” a source said.
New bidders
Earlier Hinduja was the only bidder but with now Torrent and Oaktree also confirming their participation, the CoC has decided to give the bidders more time for preparation, and to ensure that all the resolution proposals are compliant with the Insolvency and Bankruptcy Code (IBC) and Request for Resolution Plan (RFRP)
The CoC had claimed that plans submitted earlier under the first challenge mechanism were found to be non-compliant, in addition to being insufficient and unsatisfactory.
In the wake of the recently concluded case against Torrent Investments, the CoC has also assured bidders that no bids outside the auction will be considered to ensure transparency in the bidding process. Further, the highest bidder in terms of net present value (NPV) will be declared post the auction to finalise the resolution process.
The threshold bid amount for participating in the extended challenge mechanism has been set at Rs 9,500 crore on an NPV basis. Following the first round, the threshold will increase by Rs 500 crore for the second round to Rs 10,000 crore and by another Rs 250 crore for every subsequent round undertaken. The minimum upfront cash component for bidding in the first round has been set at Rs 8,000 crore.