Reliance Capital: Torrent offers to pay full Rs 8,640-cr bid amount in cash

The move is likely to further delay the insolvency proceedings of the former Anil Ambani group company. January 31 is the current deadline to complete the resolution process.

reliance capital, torrent
rrent also wanted the committee of creditors (CoC) to allow it to raise finances against RCap’s assets for deferred financing.

Days after securing interim relief from the bankruptcy tribunal, Torrent Group has revised its proposal for Reliance Capital (RCap) with an offer to pay the entire bid amount of Rs 8,640 crore in upfront cash.

This comes as a surprise as Torrent, which had earlier termed Hinduja Group’s revised bid a “blatant and arbitrary violation” of the challenge process, has now revised its bid.

The move is likely to further delay the insolvency proceedings of the former Anil Ambani group company. January 31 is the current deadline to complete the resolution process.

Earlier, Gujarat-based Torrent had placed a Rs 8,640-crore bid through a group company, Torrent Investments, to acquire all of debt-laden RCap’s assets. The group had earlier offered to pay Rs 3,750 crore in upfront cash and the balance in instalments, or deferred payment mode, sources close to the development said.

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Torrent‘s revised bid is still lower than Hinduja Group’s revised offer of Rs 9,000 crore on a net present value (NPV) basis, and this is unlikely to change the pecking order. Hinduja’s offer continues to be the highest with its upfront cash offer standing at Rs 8,800 crore,” one of the sources pointed out.

Torrent’s earlier offer included deferred payment of two-five years and was without a corporate guarantee that the group had offered in the first round with zero interest. Torrent also wanted the committee of creditors (CoC) to allow it to raise finances against RCap’s assets for deferred financing. The financial advisers to the process — Deloitte and KPMG — had stated that the upfront cash of Torrent was only Rs 3,750 crore.

As the challenge mechanism for the bidding process ended in December, Torrent’s bid was the highest, but the Hinduja Group revised its offer with an upfront cash component of Rs 8,800 crore. The renewed offer, which was made through a group company IndusInd International Holdings (IIHL), came after the e-auctions ended.

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Torrent, in a communication to RCap administrator and the CoC, said there were no provisions to accept a non-compliant submission of revised bids and that the revised bid was “patently illegal”. This also vitiates the whole process, it had said.

Torrent had also termed the revised bidding a “blatant and arbitrary violation” of the challenge process and later filed an interlocutory application before the National Company Law Tribunal’s (NCLT) Mumbai bench. The company sought that the bankruptcy tribunal direct RCap lenders not to accept Hinduja Group’s revised offer.

On January 3, providing an interim relief to Torrent, NCLT stayed the resolution process and posted the case for hearing again on January 12. The tribunal had also asked the administrator to file a reply on Torrent’s petition.

Following the order, the CoC has sought time to move the National Company Law Appellate Tribunal (NCLAT). The CoC is also planning to file an extension application with the NCLT to postpone the resolution process timeline to February 15 from the current January 31.

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First published on: 07-01-2023 at 06:00 IST
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