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Bidders for Reliance Capital subsidiaries to get just cash-only option

While there will be no option to make deferred payment bids for subsidiaries, all cash bids received for the bankruptcy firm would be given utmost priority, as per the Request For Resolution Plan(RFRP) document being formalised by the lenders.

Bidders for the entire assets of the company will have the option to make all-cash bids or combinations of upfront cash-cum-deferred payment bids. The timeline to pay upfront cash will be 90 days, sources closed to the development said.
Bidders for the entire assets of the company will have the option to make all-cash bids or combinations of upfront cash-cum-deferred payment bids. The timeline to pay upfront cash will be 90 days, sources closed to the development said.

The committee of creditors (CoC)of Reliance Capital (RCap) has decided to provide a “cash-only” option for bidders of its subsidiaries, while the investors for the entire company can make both cash and deferred payment bids.

While there will be no option to make deferred payment bids for subsidiaries, all cash bids received for the bankruptcy firm would be given utmost priority, as per the Request For Resolution Plan(RFRP) document being formalised by the lenders.

Bidders for the entire assets of the company will have the option to make all-cash bids or combinations of upfront cash-cum-deferred payment bids. The timeline to pay upfront cash will be 90 days, sources closed to the development said.

According to the RFRP, bidders have two options: either to bid for the entire assets of the company or one or more of its clusters (subsidiaries). The subsidiaries are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Asset Reconstruction Company, Reliance Securities, Reliance Commercial Finance and Reliance Home Finance.

Creditors of the former Anil Ambani group company are seeking Rs 23,666 crore in dues. The lenders will have the right to the cash on the company’s books, and it will not be considered part of the recovery proceeds for the successful bidder.

Bidders offering all-cash bids will also be exempt from infusing further equity into the company. Bidders for the subsidiaries have the option of forming consortiums amongst themselves to bid for RCap at the company level, they said.

The final RFRP document is expected to be released within a week’s time.

In March, an RBI-appointed administrator received 55 bids for RCap’s insolvency proceedings, of which 22 were for the entire company. The applicants included a consortium led by Piramal Group, Yes Bank, Zurich Insurance Company, IndusInd International Holdings, Jindal Power and Darwin Platform Group of Companies chairman Ajay Harinath Singh among others.

On November 29, 2021, the Reserve Bank of India superseded Reliance Capital’s board following payment defaults and governance issues, and appointed Nageswara Rao Y as the administrator for the bankruptcy process. The regulator also filed an application for initiation of CIRP against the company.

Earlier this month, Credit Suisse and Axis Bank — two lenders to RCap — dragged the debt-laden firm to the National Company Law Tribunal (NCLT), seeking recovery of debts worth Rs 760 crore. Credit Suisse was seeking about Rs660 crore in dues from RCap and Axis Bank about Rs 100 crore. NCLT’s Mumbai bench is slated to hear the matters separately on May 9 and May 10.

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