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Financial Offers for Reliance Capital Must Be Submitted Monday

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The bidders for dependency capital assets must submit their financial bids by August 29 (Monday) as the bid submission deadline is tomorrow.



The bidders will submit their final non-binding indicative offers under two options. Option 1 allows bidders to bid on Reliance Capital as Core Investment Company (CIC), while the second option gives bidders freedom to buy CAP‘s different business clusters, individually or in combination.

Although the lenders want to sell Reliance Capital more as a company (CIC) than individual companies individually.

The deadline for submitting bids has been extended by the lenders five times in the past.

The timeline for the completion of Reliance Capital’s resolution process has also been extended twice by the lenders. Now the last deadline to complete the process is November 1, 2022.

At the start of Reliance Capital’s settlement process, more than 54 companies had filed an Expression of Interest (EOI) for the various assets, but now only a handful of bidders are actively involved with the Administrator.

According to bank sources, of the 54 EOIs initially received, only four to five bidders, including Piramal Group and Yes Bank, are currently actively involved in Reliance Capital’s settlement process.

Due to the poor response, the Creditors’ Committee (COC) even waived the condition to pay Rs. 75 kr. Earnest Money Deposit (EMD), on the first filing date.

Bidders’ main concerns were Reliance Capital’s treatment of three key business clusters, namely Reliance Commercial Finance (RCF), Reliance Home Financing (RHF) and Reliance General Insurance Company (RGIC).

Both RCF and RHF had gone through a separate resolution process with Authum Investment and Infrastructure long before RCAP was referred to NCLT.

On the other hand, the shares of Reliance General Insurance, the most valuable asset in RCAP’s entire corporate portfolio, are held by IDBI Trusteeship on behalf of Credit Suisse. IDBI Trusteeship has declined to release these shares for the ongoing NCLT-led settlement process.

To allay the bidders’ concerns regarding the RCF and RHF, the COC has proposed that both entities be held in a separate Trust for the resolution of Authum Investment and Infrastructure.

The combined debt of these two entities – RCF and RHF is approximately Rs. 25,000 Cr. The proposed trust structure would ensure that the CAP bidders would not have to deal with this debt. The debt of RPCAP is about Rs. 20,000 kr.

The trust structure would ensure that of the Rs 45,000 crore debt, the Rs 25,000 crore debt of RCF and RHF will be excluded from this settlement process.

As for the shares of RGIC, a stalemate has developed between the lenders and IDBI Trusteeship.

IDBI Trusteeship Services Limited, acting in its capacity as trustee of bonds on behalf of Credit Suisse, had in November 2019 invoked the lien on RCAP’s 100 percent interest in RGICL and transferred the shares into its account.

RGICL is RCAP’s most valuable asset and the Manager intends to include the same as part of RCAP’s IBC process and debt settlement, but with the IDBI Trustee refusing to release RCIC’s shares, the process appears to have encountered an obstacle.

According to the bankers involved in the process, the value of Reliance General Insurance’s business is estimated to be around Rs 5,000 crore to 6,000 crore.

Bidders have expressed questions and concerns about how to make an offer for Reliance General Insurance if the company’s stock is held by IDBI Trusteeship, which has declined to release it for inclusion in the pending IBC process.

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