The committee of creditors (CoC) of Reliance Capital, on Monday, voted for equal distribution of proceeds between all members, regardless of whether they are in favour of the resolution plan.
“There are two valuations. One is liquidation value and the other is redistribution value. Here, liquidation value is high, so CoC members were requested that even if someone is dissenting, liquidation value will not be taken and resolution value will be considered for redistribution,” a source told businessline, adding that over 99 per cent of the members voted in favour of this.
According to this approval, there will now be no distinction between consenting and dissenting members and everyone will get the amount in proportion of their claims. Usually, consenting members are paid as per the resolution value and dissenting members as per the liquidation value.
The move is reportedly aimed at avoiding any inter-creditor disputes, especially given the delay in the resolution process. Creditors include priority secured creditors, secured creditors, unsecured creditors, and operational creditors.
The CoC is still to finalise the resolution plan, voting for which also take place this week, sources said.
Once Hinduja Group’s resolution plan has been voted on and approved, CoC will seek the National Company Law Tribunal (NCLT)’s approval for the same, ahead of the deadline of July 15.
Hinduja Group via IndusInd International Holdings, was the sole bidder in the extended challenge mechanism for resolution of RCap, submitting a bid of ₹9,650 crore, which included a proposal to infuse ₹300 crore in Reliance General Insurance.
Reliance Capital has approached the Supreme Court with the details of the second auction as per the requirements of the pending litigation against Torrent Investments which had alleged preference to the Hinduja Group and had objected to holding the second round of the challenge mechanism.
The apex court has not put any restrictions on the resolution process and so the CoC is confident that the legal issue and resolution are separate issues and the NCLT will go ahead with the resolution plan.
However, now that the resolution process is at the final stages, the CoC has asked the SC for a hearing sooner than the expected timeline of August, sources said.