Piramal and Oaktree seek more time to bid for Reliance Capital

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Bankrupt Reliance Capital (RCap) bidders are asking for more time to submit bids as they scramble to identify company assets.

Bidders including Piramal Capital, Torrent, Oaktree Capital and IndusInd Bank have written to the administrator again extending the deadline for submitting bids to September 15 from August 10. The date for submitting the resolution plan has already been extended four times in the past two years. month.

The Committee of Creditors (CoC) is meeting next week to provide an update on Reliance Capital’s resolution process. They would make a decision on extending the deadline.

Several lenders including Life Insurance Corporation of India (LIC) have made total claims of Rs 25,333 crore against Reliance Capital.

Two subsidiaries of Reliance Capital – home finance and non-bank finance company (NBFC) – have additional debt of Rs 25,000 crore on their books.

A banking source said the extension of time will be granted as there are not many bidders in the running. Of the 54 companies that had expressed an interest in making an offer, only four remained in the race.

The RCap resolution has been fraught with regulatory hurdles from the start of the process.

The prerequisite of forming a consortium by different bidders for RCap’s multiple business lines, and the condition of making all-cash bids drove most bidders away.

Piramal and Oaktree, which fought an uphill battle to acquire bankrupt housing finance company DHFL, have formed a consortium to bid for the assets of Reliance Capital. It is primarily intended for insurance companies.

LIC attempted to sell its exposure to bonds worth Rs 3,400 crore issued by Reliance Capital but found no takers among the asset reconstruction companies. This comes as the deadline for submitting Expressions of Interest (EOI) has expired. Bonds trade at a 70% discount.

Interestingly, the lenders decided to place the equity of Reliance Commercial Finance and Reliance Housing Finance, subsidiaries of Reliance Capital, in a separate trust.

This is done so that potential bidders do not have to deal with these entities. The proposed trust structure would ensure that parent company bidders do not have to incur this additional debt.

The lenders hope they will be able to resolve the combined debt of Reliance Capital and its subsidiaries worth Rs 50,333 crore by the end of the current financial year.

Reliance Capital was sent for debt resolution by the Reserve Bank of India (RBI) in November last year after the company, previously owned by Anil Ambani, defaulted on its loans.

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