The Committee of creditors (CoC) of debt-laden Reliance Capital (RCap) is yet to decide a date for the second round of e-auction as lenders and bidders cited lack of clarity on its outcome. This follows a Supreme Court order that permitted holding the second e-auction, but listed the matter for hearing again in August.
At the CoC’s meeting on Friday, the lenders, administrator and bidders were apprehensive of how a winner could be decided as the apex court’s final order is at least five months away. The meeting was convened to take a decision on the new date for the extended challenge mechanism (second e-auction), sources close to the development said.
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“The Supreme Court order has put all the parties in a bind. With the ongoing litigations, there is a lack of clarity on the way forward and what the final order would be. All the parties have sought more time to figure out this,” one of the sources said.
On March 20, rejecting a petition filed by Torrent Group, one of the bidders for the former Anil Ambani group company, the apex court refused to stay a National Company Law Appellate Tribunal’s (NCLAT) order that permitted holding a second e-auction. This enabled the CoC to proceed with its plans of inviting expression of interests from resolution applicants and hold the proposed extended challenge mechanism.
The CoC had initially planned to hold the extended challenge mechanism on March 29, subject to approvals of the administrator and bidders.
RCap has been in insolvency since November 29, 2021, when the RBI
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Earlier this month, Torrent Group moved the Supreme Court against NCLAT’s order that permitted holding an extended auction for the debt-laden firm. Vistra ITCL (India), a member of the CoC was the respondent in the case.
The appellate tribunal had permitted holding the second e-auction allowing the lenders’ plea to “maximise value” of debt-laden firm as the bids received were “sub-optimal and unsatisfactory”.