Torrent Investments is the highest bidder for Anil Ambani-owned , having offered Rs 8,640 crore for the debt-laden financier at an auction held on Wednesday, three people aware of the development told ET. Torrent has more than doubled its initial offer made late last month.
Hinduja Group made the second-highest offer, of Rs 8,110 crore, for the core investment company that houses 20 financial services entities, ranging from insurance to broking, the people said.
Hinduja, Torrent Investments and Oaktree Capital participated in Wednesday’s auction to sell Reliance Capital, which is undergoing corporate insolvency proceedings.
was the highest bidder in the first round of the auction, while Torrent Investments was the highest bidder in the second and third rounds on Wednesday, one of the persons cited above said.
Oaktree Capital exited the race after offering `6,800 crore, the same person said. Offers submitted during Wednesday’s auction were on a net present value (NPV) basis, which discounts future payments at a common discounting factor.
The offer from Torrent would equate to a recovery of 34 paise on a rupee on an NPV basis.
Torrent Investments, Oaktree and Reliance Capital administrator Y Nageswara Rao did not respond to ET’s requests for comments. Hinduja Group could not be reached for comments.
At Wednesday’s auctions, Torrent increased its bid to Rs 8,640 crore, from its November 28 offer.
It had then offered staggered payments of Rs 5,520 crore, which equated to an NPV of Rs 4,206 crore.
All three bidders must submit a detailed resolution plan by Thursday evening. The resolution plan will have details on upfront and staggered payments to lenders and other creditors, and outline the source of funding the acquisition. Also, a sum of Rs 200 crore lying in the company as cash and cash equivalent will be distributed among lenders, said the people cited above.
The Piramal Enterprises-Cosmea Financial Holding team, which gave the highest binding bid of Rs 5,231 crore on November 28, did not participate in the auction. Cosmea exited from the race on Tuesday, making it difficult for its partner Piramal to participate in the auction process, ET reported on Wednesday.
BETTER VALUE
The auction has also helped lenders narrow the wide gap betwe en liquidation value and bids.
In the first round concluded late in November, lenders received bids 60-70% below the liquidation value, prompting them to hold an auction to get improved offers.
The administrator has admitted Rs 25,335 crore in claims from financial creditors. Lenders had fixed Rs 6,500 crore as the threshold bid amount (TBA) for the first round of the auction. This was increased by Rs 1,000 crore in the second and third rounds. It was to be improved by Rs 500 crore and Rs 250 crore in the fourth and fifth rounds, respectively. Effectively, the TBA for the second round was Rs 7,500 crore and Rs 8,500 crore for the third, Rs 9,000 crore for the fourth and Rs 9,250 crore for the fifth round.
Prospective buyers could also offer multiples of Rs 10 crore after submitting a threshold bid.
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