Oaktree may exit Reliance Capital resolution process: Reports

8 Dec 2022 , 08:34 AM

One of the four bidders for the debt-ridden Reliance Capital resolution process, US-based Oaktree, may withdraw if its conditions are not met, according to news reports. Reliance Capital’s financial results are reportedly being sought by Oaktree until December 2022, with a four-week extension granted until January 31, 2023, to execute the auction process.

According to the report, lenders are hesitant to agree to the bidder’s demand.

The resolution of Reliance Capital must be completed by January 31, 2023, under the National Company Law Tribunal’s (NCLT) judgment.

Reports claim that the lenders worry Oaktree won’t take part in the auction, which will take place the week beginning December 19.

Following Oaktree’s withdrawal, the Cosmea-Piramal consortium, Hinduja, and Torrent Group would be the only three bidders competing for the Reliance Capital resolution.

According to the report, the Committee of Creditors (CoC) will meet on Friday to finalize the regulations and auction procedure for the proposed e-auction.

Lenders can choose between ascending auction and descending auction when using e-auction.

According to reports, foreign banks are advocating for a declining auction. The base price in the descending auction will be a fair value of Rs17,000 crore.

The highest offer value submitted by the Cosmea and Piramal consortium will serve as the base price in the ascending auction procedure, which is preferred by LIC and EPFO, at Rs5,300 crore.

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 administrator for the company’s Corporate Insolvency Resolution Process (CIRP).

The third significant non-banking financial institution (NBFC) against which the central bank has commenced insolvency proceedings under the IBC is Reliance Capital.

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

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