Lenders extend Reliance Capital resolution deadline by 2 months to November
Lenders to debt-ridden Reliance Capital Ltd (RCL) decided on Sunday to extend the deadline for the resolution process by another two months until November 2, as bidders for its acquisition received a lukewarm response.
The deadline has already been extended once by 90 days – from June 3 to September 2, 2022. This is the second extension granted by the Committee of Creditors (CoC) for the completion of the RCL resolution process.
In accordance with the rules of the Insolvency and Bankruptcy Code (IBC), the administrator had to close the resolution of RCL within 180 days – before June 3.
In addition, the CoC also decided to extend the deadline for submission of the resolution plan by potential bidders from June 20 to July 11.
The deadline for submitting the resolution plan was extended as a few potential bidders had written to the administrator asking for more time for submission, sources said.
Piramal Enterprise had requested that the deadline be extended to August 10, while IndusInd Bank had requested to extend the deadline to July 15, the sources said.
According to the sources, the deadlines for completing the resolution process and submitting the resolution plan have been extended due to the cold response from bidders.
Of the roughly 54 expressions of interest (EoIs) initially received, only a handful of bidders are now committed to the administrator, the sources said, adding that the lenders had given bidders two options.
Under the first option, the bidders were allowed to acquire RCL and its eight subsidiaries. Piramal Enterprises, Yes Bank and Torrent Group have opted for this option.
In the second option, bidders could submit resolution plans even for a single subsidiary. For the non-life insurance division, Zurich Insurance showed interest, while Cholamandalam Group was interested in the Life Insurance branch of RCL.
The Reserve Bank of India (RBI) had, on November 29, replaced the board of directors of Reliance Capital Ltd (RCL) due to payment defaults and serious governance problems.
The RBI has appointed Nageswara Rao Y as administrator under the company’s Corporate Insolvency Resolution Process (CIRP).
It is the third major non-bank financial company (NBFC) against which the central bank has recently initiated bankruptcy proceedings under the IBC. The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
The RBI then filed a CIRP application against the company at the Mumbai bench of the National Company Law Tribunal (NCLT).
In February this year, the RBI-appointed administrator invited Expressions of Interest (EOI) for the sale of Reliance Capital.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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