The bidders for Reliance Capital’s (RCap) assets have sought another 20-35 days to submit the resolution plans for the debt-laden firm, as they need more time to complete the due diligence process.
The current deadline to submit the resolution plans, which was already extended four times, ends on August 10.
A number of bidders, including a consortium led by Piramal Enterprises, Torrent Group, OakTree Capital and Indusind International have sent separate letters to the administrator seeking extension of the deadline. While some of the bidders have sought to extend it by another 20 days to August 30, a majority of them want it to be extended to September 15, sources close to the development told FE.
The Committee of Creditors (CoC) will meet this week to consider the request and take stock on the progress of the resolution process, another source said.
Some of the bidders, or Prospective Resolution Applicants (PRAs), were hopeful that the CoC would probably provide another extension due to a poor response to the process. Further, many of the bidders are yet to complete the due diligence due to lack of sufficient data to conduct verification of the entities under the Corporate Insolvency Resolution Process (CIRP).
Earlier on July 1, RCap’s lenders had extended the deadline by a month to August 10, after five prominent bidders backed out of the race. According to the earlier plan, the last date for the prospective bidders to submit the resolution plan was July 11. This in itself was an extension from the earlier June 20 deadline.
However, as of now there is no change in the November 2 deadline for the completion of the resolution process.
Prompted by a poor response, RCap lenders had earlier proposed to separate two group companies’ assets into a separate trust to speed-up the process.
The CoC had decided to separate the assets and liabilities of Reliance Commercial Finance and Reliance Home Finance, which have a combined debt of about Rs 25,000 crore, into a trust. This was to bring down the debt of RCap and for faster conclusion of the CIRP.
Further, they have also waived off a condition of an earnest money deposit of Rs 75 crore on the first date of submission.
RCap has a debt of about Rs 20,000 crore, and together with RCF and RHF, it stands at about Rs 45,000 crore.
On November 29, 2021, RBI had superseded RCap’s board following payment defaults and governance issues, and appointed an administrator for the bankruptcy process. Later in April, Credit Suisse and Axis Bank – two lenders to RCap – had dragged the debt-laden firm to the National Company Law Tribunal (NCLT), seeking recovery of debts worth Rs 760 crore. In February this year, the administrator invited Expression of Interests for sale of RCap’s assets.