The lenders to Reliance Capital (RCap) have extended the deadline for submission of resolution plans by another 18 days to August 28, after bidders sought more time to complete the due diligence process. This is the fifth time the submission date has been extended, while the date for completion of the process remains unchanged. The earlier deadline to submit the resolution plans ends on August 10.
“The committee of creditors (CoC) have decided to provide another extension, but is planning to close the entire resolution process on time. Some of the bidders had sought extension of the deadline by another 20 days to August 30, while a majority of them wants it to be extended to September 15,” a source close to the development told FE.
According to another source, in separate letters sent to the CoC, Piramal Enterprises and Torrent Group had sought for an extension till September 30, while IndusInd International wanted the deadline to get extended to August 30. “However, the CoC’s decision was to extend the deadline till August 28,” the source said.
The extension is also due to a poor response from bidders, or prospective resolution applicants (PRAs), with many of them backing out of the process. The bidders, who were pursuing the process, had complained of lack of sufficient data to conduct verification of the entities, and had sought more time.
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 June 20 deadline.
Due to the poor response, RCap’s lenders had earlier proposed to separate assets of two group companies into a trust to fast-track 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, the figure stands at around Rs 45,000 crore.