Race for RCap down to two players; Torrent offers highest bid

 

Torrent Group has made a bid of 8,640 crores to acquire the NBFC unit of Anil Ambani Group. (File photo: Reuters)

• Cosmea Financial pulled out of the resolution process on Tuesday citing higher than expected original bid of ₹6,500 crore

MUMBAI: Torrent Group has emerged as the highest bidder for debt-laden Reliance Capital in the first phase of the auction held on Wednesday, according to two officials familiar with the matter.

Ahmedabad-based Torrent Group bids ₹8,640 crore to acquire the Anil Ambani group company.

Now the only other company left in the race is Hinduja Group with an offer of ₹8,110 crore. Officials said Oaktree and the Cosmia-Piramal consortium made a last-minute decision to withdraw from the race.

“The committee of creditors will have to study the final details of the resolution plan, which includes the cash component offered by Torrent and Hinduja, before finalizing the winning bid,” said an official.

Torrent offered ₹4,500 crore and Hinduja ₹3,050 crore in the initial bidding round.

Cosmea Financial on Tuesday pulled out of the resolution process citing higher than expected base bid of ₹6,500 crore.

Cosmea's move made it difficult for Piramal Enterprises to participate in the auction, as it was bidding only for a Reliance Capital unit. The E-Auction Rules allow only those bidders to participate who bid for the entire company. The Cosmea-Piramal consortium had bid for the company and its subsidiaries, with the Piramal Group's liability limited to Reliance General Insurance.

In a letter to the administrator on Monday, Cosmea clarified that the revised bid was ₹1,500 crore higher than the net present value offered by them.


As per the new rules, bidders in the first and second rounds will have to raise their bid price by at least ₹1,000 crore. In the third and fourth rounds, the amount will have to be increased to ₹500 crore and ₹250 crore respectively. This would mean that the required bids should be ₹7,500 crore, ₹8,500 crore, ₹9,000 crore and ₹9,250 crore, respectively.

Last week, the committee of creditors had called for an e-auction for Reliance Capital after they found that the initial bids were lower than the liquidation value. The lenders had asked the bidders to revise the bid price else the companies would go for liquidation. The bidders and the CoC agreed to hold the auction, which took place on Wednesday.