The committee of creditors (CoC) of debt-laden Reliance Capital (RCap) is slated to meet on Friday to decide on adding the ‘challenge mechanism’, after bidders raised concerns over the new clause. The move comes at a time when the firm’s insolvency process is inching towards a closure, with the deadline to complete it ending on January 31.
The bidders have also moved the administrator of the process stating there were no such clauses in earlier resolutions conducted through the National Company Law Tribunal (NCLT).
Also Read: Reliance Capital Insolvency: CoC extends deadline to submit binding bids to November 20
The bidders such as Hinduja Group, Oaktree Capital and Torrent Group, who are bidding for RCap as a core investment company (CIC), also raised flags as the clause is being added at this stage of the resolution process.
The advisors to the CoC had suggested multiple options under the challenge mechanism, including the ‘Swiss Challenge Process’ where the highest bidder will be declared as an anchor bidder and will have the right of first refusal (RoFR). Other options include negotiations with CoC by bidders, electronic auction to declare the highest bidder or combination of these.
