Bidders for Reliance Capital want more time for submitting a resolution plan

  • India Infoline News Service |
  • 01 Aug, 2022 |
  • 9:01 AM

According to news reports, bidders are requesting more time to finish the due diligence process, therefore the deadline for submitting a resolution plan for the heavily indebted Reliance Capital may be extended further.

The administrator has received letters from a select few bidders, including Piramal, Torrent, Oaktree, and IndusInd Bank, asking for the deadline to be extended from the current August 10 to September 15.

The deadline for submitting Reliance Capital's resolution plan has already been postponed four times. The deadline for submissions was set for May 26.

The Committee of Creditors (CoC) will convene next week to assess Reliance Capital's resolution procedure and to discuss the possibility of extending the deadline.

Only 5 to 6 bidders are currently engaged at the due diligence stage, down from the initial 54 Expressions of Interest (EOI) that Reliance Capital Ltd (RCL) received.

The CoC has also exempted the need of depositing Rs75 crore Earnest Money Deposit (EMD) by the first submission date due to the underwhelming response to the Reliance Capital resolution process.

Piramal is prohibited by regulations from acquiring a promoter stake in another life insurance company while also holding one in another life insurance company. Piramal Group promotes Pramerica Life Insurance Limited (PLIL).

Due to payment defaults and major governance difficulties, the Reserve Bank of India (RBI) replaced the RCL board on November 29 of last year.

Nageswara Rao Y was chosen by the RBI to serve as the company's corporate insolvency resolution process (CIRP) administrator.

The central bank recently began bankruptcy procedures under IBC against this third sizable Non-Banking Financial Company (NBFC). Srei Group NBFC and Dewan Housing Finance Corporation were the other two (DHFL).

RBI subsequently requested that CIRP be initiated against the company at the National Company Law Tribunal's Mumbai bench (NCLT).

The RBI-appointed administrator had requested expressions of interest for the sale of Reliance Capital in February of this year. 

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