In a relief to Torrent Group, the National Company Law Tribunal (NCLT) has directed the lenders of debt-laden Reliance Capital (RCap) not to accept Hinduja Group’s revised offer till further orders. The Mumbai bench of the bankruptcy court will hear the petition again on January 12.
The interim stay was provided after Torrent Group filed an interlocutory application on Monday. Torrent Investments, a group company filed a petition before NCLT seeking to direct RCap’s administrator not to accept Hinduja’s revised bids that were submitted a day after the e-auctions ended. The petition was filed on Monday, a day before the crucial Committee of Creditors’ (CoC) meeting to finalise the resolution process and decide the winning bidder.
The tribunal 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 move is likely to further delay the insolvency proceedings of the former Anil Ambani group company, as January 31 is the deadline to close the resolution process.
On December 23, Hinduja Group had revised its bid for RCap with a Net Present Value (NPV) offer of ₹9,000 crore, with an offer to provide the entire sum upfront in cash, much above Torrent Group’s highest bid of ₹8,640 crore. The Hinduja Group’s renewed offer, which was made through a group company IndusInd International Holdings Ltd (IIHL), came after the e-auctions ended, which according to Torrent was a “blatant and arbitrary violation” of the challenge process.
Torrent, in a communication to RCap administrator and CoC, said that there were no provisions to accept a non-compliant submission of revised bids and was patently illegal. This also vitiates the whole process, it added.
In the e-auction conducted under the challenge mechanism, Torrent had presented a resolution plan with an NPV of ₹8,640 crore, while that by Hinduja’s was at ₹8,110 crore.
Earlier in 2018, in a landmark decision, NCLAT ruled that the purpose of the bankruptcy process is to extract the maximum value from auctions of stressed assets, approving UltraTech
However, the CoC held its meeting as per earlier schedule on Tuesday, and discussed the resolution plans submitted by the bidders. A comparison by the financial advisors, Deloitte and KPMG, stated that the upfront cash of Torrent was only ₹3,750 crore, as against IIHL’s ₹9,000 crore upfront cash offer.
Torrent’s deferred payment of two-five years was without a corporate guarantee that was offered in the first round at zero interest. Torrent also wants the CoC to allow it to raise finances against RCap’s assets for deferred financing.
The lenders are also planning to file an extension application with NCLT to postpone the resolution process completion timeline to February 15 from the present January 31.