Swiss Challenge is a method of bidding. In this a party bids for an asset. Its details are made public and bids are sought from other people. If a party places a higher bid, the original contractor is given a chance to match the bid. But in the case of Reliance Cap, nobody bid. Today i.e. on Monday, final binding can be done for the entire assets of Reliance Cap. According to sources, process advisor IDBI Trusteeship has not received any bid to sell the loan of LIC. The deadline for bidding for this has ended on Friday.
questions may arise
Based on the offer of ACRE SSG, Reliance Capital is valued at around Rs 4,400 crore. Both LIC and ACRE SSG are members of the Committee of Creditors of Reliance Capital. ACRE has a debt of Rs 1350 crore on the company. Duff & Phelps has done an independent valuation of Reliance Cap. But according to the IBC law, the CoC will get its report only a day after the binding bid. A banker said that if the independent valuer’s valuation is higher than the ACRE-LIC transaction, then the low valuation of LIC’s debt sale could be questioned.
Reliance Capital has about 20 financial services companies. These include securities broking, insurance and an ARC. RBI had dissolved the board of heavily debt-ridden Reliance Capital on 30 November 2021 and initiated insolvency proceedings against it. Nageswara Rao was appointed as the administrator of the company by the Central Bank. Rao had given the bidders an option to bid for the entire company or individual companies. Reliance Capital was given time till August 29 to bid.
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