The Supreme Court on Friday refused to stay the proceedings before NCLAT, which is looking into the grant of approval to the Hinduja Group company’s resolution plan for the acquisition of Reliance Capital.
Gujarat-based Torrent Investments had emerged as the highest bidder with its Rs 8,640 crore in the initial bidding in the first auction on December 21, while the Hinduja Group entity offered Rs 8,110 crore. However, within 24 hours, Hinduja made a revised, improved offer of Rs 9,000 crore, a development Torrent contested at the National Company Law Tribunal (NCLT), saying that it violated the sanctity of the auction process as it was made after the deadline.
The NCLT bench ruled in favour of Torrent, barring lenders from holding a second auction. However, the appellate authority overturned the tribunal order. In mid-April, the Supreme Court directed lenders to hold a challenge-mechanism auction, but also said it would again hear the matter in August.
Further, the following auction was held on April 26, wherein Hinduja offered Rs 9,640 crore while Torrent did not participate.
The deal would also require the SC’s approval since Torrent Investments, one of the initial bidders, had appealed over the extension of the first round of auction beyond the original deadline.
ET reported in July that the Hinduja family has sounded out global credit funds to raise up to $1 billion (about Rs 8,200 crore) to finance the potential acquisition of Reliance Capital for which it is the favored bidder after lenders to the insolvent financial services company approved Hinduja’s resolution plan.
Reliance Capital’s lenders have approved a Rs 9,650-crore resolution plan made under the insolvency and bankruptcy code (IBC) rules from Hinduja Group company IndusInd International Holdings Limited (IIHL), the Hinduja Group announced on July 3. Its offer could result in a successful debt resolution for the debt-laden Reliance Capital, which will be only the second large financial services company after Dewan Housing Finance (DHFL) to be sold under provisions of the IBC.
The RBI had superseded the board of Anil Ambani-owned Reliance Capital on November 30, 2021 citing governance concerns. It brought in Nageswara Rao Y, a former executive director at Bank of Maharashtra, as the company’s administrator.
Financial creditors of the company have filed claims worth Rs 24,000 crore for recovery of their dues.
(With inputs from Indu Bhan of ET Bureau)
