The committee of creditors (CoC) of Reliance Capital has postponed the extended challenge mechanism for resolution of the company to April 26 to ensure the bids are compliant with the IBC and RFRP (Request for Resolution Plan).

The second auction was earlier scheduled to be held on Tuesday.

The postponement is owing to advance discussions between bidders and CoC members on several factors, including compliance—which was one of the major points of contention by the CoC in the ongoing court case, sources told businessline.

Torrent Investments, Hinduja Group and Oaktree Capital are reportedly the confirmed bidders and are currently in discussions with the CoC for the challenge mechanism.

“Those points which were discussed will now be incorporated into the draft plans and resubmitted to the COC, which will vet them before the challenge mechanism,” a source said.

Bidders cautious

On their part, bidders are also being extra cautious and want certainty that there will no further negotiations post the extended challenge mechanism.

As such, Reliance Capital has sought a 90-day extension in the resolution deadline from NCLT (National Company Law Tribunal) beyond the current deadline of April 16. If approved, the CoC will have time till the middle of July to complete the resolution process.

In addition to the delay in the second auction, the extension is also owing to the ongoing case, wherein Reliance Capital and the CoC will have to submit the findings and result of the second auction under the RFRP to the apex court.

The Supreme Court had given the CoC six weeks for a written submission, which ends towards the end of April. The CoC has set a bid threshold of ₹9,000 crore on an NPV (net present value) basis for the second auction with the minimum upfront cash component set at ₹8,000 crore. This is higher than the highest NPV bid of ₹8,640 crore received under the first round.

Related Topics
comment COMMENT NOW