Committee of creditors may ask bidders to sweeten offers for RCap

The committee of creditors (CoC) of Reliance Capital is likely to ask the bidders of the bankrupt company to sweeten their offers as the current bids are too low.

 According to a banking source, in its meeting here on Wednesday, the CoC decided to make a detailed evaluation and have a discussion on all the bids made for the company. No final decision has been taken on the fate of the bids, the source said.

Several entities, including Hindujas, Piramal-Cosmea Financial Holdings, Oaktree, and Ahmedabad-based Torrent, made bids for the entire company by the Monday deadline. Piramal-Cosmea made the best offer for the company but it was far lower than the CoC’s expectations of around Rs 8,000 crore, based on the valuation done by it, said a banker close to the development.

As many as 55 companies submitted expressions of interest (EoIs) for Reliance Capital but only a few submitted binding bids. Just before the bids were submitted, an indication of possible valuation of Reliance Capital was received when the Swiss Challenge process to sell Life Insurance Corporation’s debt worth Rs 3,400 crore given to Reliance Capital did not get a rival bid, thus paving the way for ACRE SSG, a stressed asset firm, to acquire the debt at a 73 per cent haircut to LIC. ACRE’s offer for the LIC debt values Reliance Capital as a core investment company at around Rs 4,400 crore.

Reliance Capital was sent for debt resolution in November last year by the Reserve Bank of India, with banks making claims of around Rs 24,000 crore against the company.