Deloitte, Process Advisor Reliance Capital Limited ,rcl, administrator Sources said Y Nageswara Rao is of the opinion that the bids are about 70 per cent lower than the liquidation price of Rs 13,000 crore.
Reliance Capital should go for liquidation under Section 6(a) of the bankruptcy and bankruptcy The Code (IBC) would result in recovery of around Rs 13,000 crore to the company.
On the other hand, the CoC, advisor to KPMG, is of the view that they should go ahead with the ongoing process and finalize the resolution process by bidding to the highest bidder. Sources said there is difference of opinion not only between the two process advisors but also among the CoC members on various options for resolution.
According to sources, a section of the CoC members have recommended a ‘closed cover option’ for the bidding process. Under the process, the prize would go to the highest bidder.
The second view within the CoC is that to maximize the recovery, the e-auction process should be adopted, which is a more transparent and fair system for price discovery and is the more preferred and prevalent process in India.
According to sources, this holds the key to resolving the differences. LIC and EPFO, which collectively control 35 per cent voting rights in the CoC.
LIC and EPFO ​​have a loan of Rs 3,400 crore and Rs 2,500 crore respectively in debt ridden RCL.
Sources said the decision of LIC and EPFO ​​will play a key role in deciding the final resolution process. resolution process.
Consequently, Tuesday’s meeting of the CoC is significant in the view that all these divergent views and options will be discussed among the lenders, which will be acceptable to all stakeholders, sources said.
Reliance Capital received four binding bids on November 28, the last date for submission of bids.
Cosmea Financial and Piramal have jointly submitted the highest bid with a bid value of Rs 5,231 crore. followed by Hinduja 5,060 crore with a bid price of Rs. The bid size of Torrent and Oaktree is Rs 4,500 crore and Rs 4,200 crore, respectively.
On the other hand, valuation reports by independent valuers peg the liquidation value of Reliance Capital Limited (RCL) at Rs 12,500 crore and Rs 13,200 crore, respectively.
The liquidation value (LV) of Reliance Capital estimated by these two independent valuers is about 70 per cent higher than the bids received by the administrator.
RCL gave two options to the bidders. Under the first option, companies can bid for Reliance Capital Ltd, which comprises eight of its subsidiaries or clusters. The second option gave freedom to the bidders to bid for the subsidiaries individually or in combination.
Eight businesses of RCL are closed. it is included general InsuranceLife Insurance, Health Insurance, Securities Business and asset reconstruction, among others.
reserve Bank of India (reserve Bank of India) dissolved the Board of RCL on November 29 last year in view of payment lapses and serious governance issues.
The RBI appointed Nageswara Rao Y as the administrator in connection with the Corporate Insolvency Resolution Process (CIRP) of the firm.
Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC.
The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). The RBI subsequently filed an application in the Mumbai bench of the National Company Law Tribunal (NCLT) for initiation of CIRP against the company.
In February this year, the RBI-appointed administrator had sought expressions of interest for the sale of Reliance Capital.