The lenders of Reliance Capital (RCap) have extended the deadline for submission of the firm’s resolution plans by a month to August 10, after five prominent bidders backed out of the race. While this is the fourth-time the submission date is being extended, the date for completion of the process remains unchanged.
The lenders, who met again on Friday to evaluate the progress of the insolvency proceedings, took the call to extend the date following requests from several existing bidders for ‘more time’ to complete the due diligence process. The prospective bidders also cited lack of sufficient data to conduct verification of the entities under the Corporate Insolvency Resolution Process (CIRP), sources close to the development said.
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, the date for completion of the firm’s resolution process would be the earlier decided November 2, they added.
The creditors of the former Anil Ambani group company are seeking Rs 23,666 crore in dues.
Earlier on June 26, five prominent bidders for RCap’s assets backed out of the race. At present, there are only five bidders, including Piramal Enterprises, actively pursuing the process.
This is in contrast to the nearly 54 Expressions of Interest (EoIs) the former Anil Ambani group firm had received in March.
The latest to pull out of the process were private equity major Blackstone, HDFC Ergo, insurance firms of ICICI Lombard and Tata Group and Adani group. Tata AIG General Insurance Company, a subsidiary of Tata Sons, had earlier evoked interest to buy RCap’s general insurance arm.
Apart from Piramal Enterprises, the Prospective Resolution Applicants (PRAs) who are actively engaged with the administrator are Yes Bank and Torrent Group. Further, Zurich Insurance has shown interest in RCap’s general insurance cluster, and Cholamandalam Group for its life insurance cluster.
According to the Request For Resolution Plan (RFRP), the 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.
On November 29, 2021, RBI had superseded RCap’s board following payment defaults and governance issues, and appointed an administrator for the bankruptcy process.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 EoIs for sale of RCap’s assets.