The lenders to debt-laden Reliance Capital (RCap) have received the bankruptcy court’s approval to extend the deadline for completion of the resolution process to July 16. This is a 91 days’ extension to the current deadline, which was extended multiple times, ending on April 16.
Earlier this week, RCap’s administrator had moved the National Company Law Tribunal’s (NCLT’s) Mumbai bench, seeking another extension, as it would be difficult to wind up the process within the stipulated time frame.
“The initial plan was to extend it to May-end, but with the deadline for the e-auction also extended, the committee of creditors (CoC) now requires more time to conclude the entire process. Following the completion of the e-auction, the administrator needs time to verify the bids, finalise the winner based on the entire resolution plan and get all necessary regulatory approvals,” a source close to the development said.
RCap has been undergoing a insolvency since November 29, 2021, when the RBI superseded its board. The new deadline of July 16, if not extended again, would mean that the completion of the resolution process would take about 595 days, much longer than the statutory time limit of 330 days.
On Tuesday, RCap’s CoC decided to hold the second round of e-auction on April 26, pushed down from April 11. This was also done to ensure “enough time” is provided to verify that all the bids are compliant with insolvency rules, and as the bidders had sought “certainty” in the process, with the Supreme Court yet to give a final order.
The CoC wanted all the resolution plans to be compliant with the Insolvency and Bankruptcy Code (IBC) and the Request for Resolution Plan (RFRP) rules before the commencement of the e-auction. This was to avoid further delays, as at the time of the first auction held on December 21, many of the plans were found to be non-compliant. The second round of e-auction (or the extended challenge mechanism) was postponed twice in the past due myriad reasons, including legal tangles. The first round of auction was held on December 21, 2022.