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RCap resolution: CoC extends the deadline to June 30

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Money & Banking

Surabhi | Mumbai, May 11 | Updated on: May 11, 2022

Only 8 of the 54 companies that had shown interest remain in the fray

Bidders for debt-ridden Reliance Capital will get another month’s time to submit resolution plans for the company. The Committee of Creditors (CoC) has decided to extend the date for the submission of the Resolution Plan to June 30 from the earlier deadline of May 26. This comes after a number of companies that had initially shown an interest in bidding for RCap assets have withdrawn from the race.

Of the 54 prospective resolution applicants who had initially submitted Expressions of Interest for the company, only about eight players are understood to be in serious discussions, said a source.

Only three bidders, including the consortium led by the Piramal Group, YES Bank and HDFC Ergo, have held management meetings for the submission of resolution plans.

“There was a request from the bidders to extend the deadline to enable them to complete the documentation,” said another source close to the development.. The decision was taken at a meeting of the CoC on Wednesday.

“Another five have sought clarifications on certain issues from the Administrator,” said the source, adding that the remaining 46 bidders have not shown any response till now.

Volatile global economic conditions are understood to have impacted sentiments amongst bidders, the source said.

Challenging conditions

It was also expected that applicants who were looking to bid for various business clusters of Reliance Capital could find the conditions put up by the CoC challenging. 

Companies that bid for various business clusters or subsidiaries of Reliance Capital have to form a consortium amongst themselves and then bid for the whole company. They would also be expected to make up the front payment.

The CoC has set easier conditions for bidders who bid for Reliance Capital at the group level under which they can make an all cash bid or a combination of upfront and deferred payment.

The total verified claims of Reliance Capital is estimated at ₹23,666 crore.

The CoC had previously decided to seek a 90-day extension for the resolution proceeding, which means that the resolution has to be completed by September 3, as against the previous deadline of June 3.

“..the tenth meeting of the CoC of the company was duly convened and conducted on Wednesday, May 11… At the aforesaid meeting, the Administrator of the company appraised the CoC about the updated on the status of claims, status of CIRP process, going concern operations of the company and the way forward in terms of the activities and milestones as stipulated under the Code,” Reliance Capital said in a stock exchange filing on Wednesday.

Results

Meanwhile, Reliance Capital also posted a consolidated net loss of Rs 4,173 crore for the fourth quarter of 2021-22 as against a net loss of Rs 1,664 crore in the same quarter in the previous fiscal.

Its total income was Rs 4,771 crore for the quarter ended March 31, 2022 as against Rs 5,202 crore a year ago.

For the full fiscal 2021-22, its net loss was Rs 8,116 crore as against a net loss of Rs 9,404 crore in 2020-21.

Published on May 11, 2022

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