The bankruptcy court in Mumbai allowed an application on Tuesday filed by the administrator of Reliance Capital to approve the Anil Ambani-promoted company’s acquisition by IndusInd International Holdings Ltd through the insolvency resolution process.
The division bench of Justice Virendra Singh Bisht and a technical member Prabhat Kumar approved the plan in an oral order. The detailed order is awaited.
Last year on June 29, the e-voting on resolution for approval of the resolution plan concluded, Reliance Capital’s Administrator Nageswara Rao Y said in a stock exchange announcement. However, he didn’t disclose the financial details in the stock exchange announcement.
“This is one of the few big financial institutions which is getting resolved after DHFL and SREI under the code. On approval of the resolution plan, the claims of all the creditors and stakeholders shall be repaid in accordance with the approved resolution plan,” said Ashish Pyasi, Partner, Aendri Legal. “For the purpose of monitoring the plan implementation, a monitoring committee will be formed as per the plan so that there is no vacuum between the period of approval and the complete satisfaction of the terms of the plan.”
The order comes in the backdrop of the development wherein the veteran lawyer Shardul Shroff had approached the Supreme Court on behalf of Torrent Investments in October last year to speed up the hearing on the company’s application to stay the second challenge mechanism in a corporate insolvency resolution process (CIRP) for the Anil Ambani-promoted Reliance Capital.
At the heart of the dispute is a bid from the Hinduja Group entity given 24 hours after the auction deadline (December 21, 2022), trumping the offer made within the stipulated time by Torrent Investments. Lenders decided to hold a second round of auction and that matter is pending before the Supreme Court.
While Torrent was the highest bidder offering Rs 8,640 crore in the first round, Hinduja offered Rs 9,660 crore in the second round. Torrent Investments, also in the fray for the distressed finance company, refrained from submitting a final plan to the lenders concerned.
In June, 99% of the lenders voted in favour of IIHL’s plan. The administrator has admitted Rs 25,345 crore of claims from lenders as of June 8, 2023.
Now, Torrent Investments has challenged the view taken by NCLAT about Regulation 39 (1A) of the Insolvency and Bankruptcy Board of India (IBBI) that it does not restrict the rights of lenders to continue negotiation on financials and the decision to do a Second Challenge Mechanism even after its conclusion is not violative of Regulation 39(1A) of the CIRP Regulations.
As per Regulation 39(1A), the bidder must prepare a resolution plan in accordance with the bankruptcy code and submit the resolution plan to the RP within the time given in the invitation made by the RP or administrator in the current case.
In November 2019, the tribunal allowed an application to initiate an insolvency process against the debt-laden financier.
