The committee of creditors (CoC) of Reliance Capital (RCap) has decided to reject all the bids it received for the former Anil Ambani group company as the prices quoted were way below its expectations. In its meeting on Wednesday, the CoC also decided to ask the bidders to revise the bids. In case quotations are not satisfactory again, the firm may be sent to liquidation, sources close to the development said.
While this will further delay RCap’s ongoing insolvency process, the liquidation would also mean more haircuts for lenders. The liquidation, slated to be under a new regulation of Insolvency and Bankruptcy Code, will enable the CoC to separately sell each individual business.
On Monday, RCap received bids from the Hinduja group, Oaktree Capital, Torrent and a joint bid from Piramal group and Cosmea Financial. No separate bid was received for Reliance General Insurance Company (RGIC) and Reliance Nippon Life Insurance Company (RNLIC).
Torrent’s bid stood at Rs 4,500 crore while that of Oaktree was at Rs 4,200 crore. Bids for Cosmea-Piramal joint venture and Hindujas were at Rs 5,231 crore and Rs 5,060 crore, respectively.
Birla Sun Life and Nippon, who were earlier interested in the life insurance business, backed out. Japan’s Nippon Life, which has a 49% stake in the Reliance Nippon Life Insurance, had shown interest in bidding for the firm’s 51% with an Indian partner. However, it was unable to stitch together any partnership.
Birla Sun Life Insurance backed out of the race after Nippon Life declined a merger due to fears of its stake falling below 10%. Both Zurich Insurance and US-based private equity investor Advent International, which had earlier submitted non-binding bids for RGIC in the initial round, stayed away in the final round.
Advent had submitted a non-binding bid of Rs 7,000 crore for RGIC during the first round of the bidding while Piramal and Zurich had quoted Rs 3,600 crore and Rs 3,700 crore, respectively.