Effectively, it would be difficult for Piramal Enterprises now to participate in the auction process scheduled Wednesday. This is mainly because Piramal’s binding offer is for one entity of Reliance Capital, while only those bidders offering to buy the entire company can participate in the challenge auction process. Furthermore, Piramal’s binding offer was made with Cosmea, which is not participating in further rounds of the sale process.
In a joint bid, Piramal Enterprises offered to acquire the general insurance business, while Cosmea was to buy the remaining units of the core investment company (CIC). The Piramal-Cosmea team’s staggered payment offer of Rs 5,231 crore was the highest among binding bids received on November 28. Torrent Investments, Hinduja Global and Oaktree Capital, are other bidders for the CIC undergoing corporate insolvency.
The administrator informed the Piramal-Cosmea team that they would not be permitted to revise their financial proposal after the completion of the challenge mechanism.
Cosmea and Reliance Capital’s administrator Nageswara Rao Y did not respond to ET’s request for comments. Piramal could be reached for immediate comment.
In a letter to the administrator on its exit, Cosmea has stated: “The contour of the process has been significantly altered and a challenge mechanism has been introduced, which does not meet our commercial objective,” one of the persons cited above said.
The administrator informed Reliance Capital’s lenders about Cosmea exiting the fray at a committee of creditors’ meeting held Tuesday. Lenders are expected to go ahead with the auction despite the highest bidder exiting the race, the people cited above said.
