RCap Lenders Will Hold Another Auction Round

MUMBAI: Lenders to Reliance Capital (RCap), headed by Life Insurance Corporation (LIC) and the Employee Provident Fund Organization (EPFO), voted in favor of hosting another round of the ‘Swiss Challenge’, allowing bidders to improve their bids. This format gives the highest bidder in the auction the chance to match the highest bid in the challenge round.
The lenders decided to hold a new round because they felt the offers received did not match their expectations. The liquidation value of the group is estimated at around Rs 12,500 crore. Most of the value that RCap holds is in its non-life insurance subsidiary, which accounts for nearly 5% of the market share. However, the settlement was complicated by complaints from Nippon Corporation, which pledges shares of non-life companies. Lenders expect to receive bids of at least Rs 9,500 crore with a cash offer of Rs 8,000 crore. In Monday, Invest torrent sought to bring a holiday from National Corporate Law Court (NCLT) on the creditor committee to organize the second round of auction. The NCLT did not allow any stay but said it would hear the matter on January 12. Hindujas IndusInd International Holdings has sought to become a party to the lawsuit.
Although Torrent Investments became the highest bidder with an offer of Rs 8,640 crore during the challenge round held last week, Hindujas made a better offer in a belated bid.


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