Piramal, Oaktree seek more time to make offers for Reliance Capital

Bidders of the bankrupt Reliance Capital (RCap) are seeking additional time to submit their offers as they grapple to identify the company’s assets.

Bidders, including Piramal Capital, Torrent, Oaktree Capital and IndusInd Bank have written to the administrator to extend the deadline to submit bids yet again to September 15 from August 10. The resolution plan submission date has already been extended four times in the past couple of months.

The Committee of Creditors (CoC) is meeting in the coming week to take stock of the resolution process of Reliance Capital. They would take a decision on the deadline extension.

Several lenders, including Life Insurance Corporation of India (LIC), have made total claims of Rs 25,333 crore against Reliance Capital.

Two subsidiaries of Reliance Capital — home finance and non-banking finance company (NBFC) — have an additional debt of Rs 25,000 crore on their books.

A banking source said the deadline extension will be granted as there are not many bidders in the race. Of the 54 companies, which had expressed their interest to make an offer, only four have remained in the race.

The RCap resolution has been fraught with regulatory hurdles since the beginning of the process.

The precondition of forming a consortium by different bidders for RCap’s multiple business clusters, and the condition to make all-cash bids drove most of the bidders away.

Piramal and Oaktree, which fought a bitter battle to acquire bankrupt housing finance firm DHFL, have formed a consortium to bid for Reliance Capital assets. It is mainly for the insurance companies.

LIC tried to sell its exposure in bonds worth Rs 3,400 crore issued by Reliance Capital but did not find any takers among asset reconstruction companies. This comes as the deadline to submit expressions of interest (EoIs) expired. The bonds are trading at 70 per cent discount.

Interestingly, the lenders have decided to place the equity of Reliance Commercial Finance and Reliance Housing Finance, the subsidiaries of Reliance Capital, into a separate trust.

This is being done so that potential bidders do not have to deal with these entities. The proposed Trust structure would ensure that the bidders of the parent firm do not have to deal with this additional debt.

Lenders are hopeful that they will be able to resolve the combined debt of Reliance Capital and its subsidiaries worth Rs 50,333 crore by the end of the current financial year.

Reliance Capital was sent for debt resolution by the Reserve Bank of India (RBI) in November last year after the company, earlier owned by Anil Ambani, defaulted on its loans.