The Supreme Court (SC) accepted Torrent Investments’ (the highest bidder with a resolution plan of 8,640 crores) appeal against the lenders’ decision to hold another round of auction on March 20, 2023.

Overview

Bidders are upset about the plan for another auction. Sources say that the lenders’ plan to hold a second round of auction for debt-ridden Reliance Capital has hit a roadblock because bidders don’t seem to want another game under the insolvency resolution process. In the meantime, the Supreme Court has scheduled an August hearing for the second auction.

While the CoC can proceed with the drawn-out challenge component, allowing moneylenders to move to a second round of closeout, the result of the sale will depend upon the ultimate conclusion of the High Court.

According to sources, Reliance Capital may be forced into liquidation because of the most recent developments if lenders and bidders cannot develop a viable solution to end the impasse. According to estimates, if they go through with liquidation, lenders stand to gain $13,000 crore.

Bankers involved in the process say that Torrent suggested holding a Swiss Challenge auction last week with their previous bid of 8,640 crores as the threshold.

End Note

Reliance Capital is the third large non-banking financial company (NBFC) for which the central bank has invoked the Insolvency and Bankruptcy Code (IBC).

The RBI, in this way, recorded an application for commencement of CIRP against the organization at the Mumbai seat of the Public Organization Regulation Court. The administrator appointed by the RBI invited expressions of interest for the sale of Reliance Capital in February of the previous year.

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