Previously, they were considering a threshold price of ₹5,231 crore, which is the highest bid they received from a consortium of
and Cosmea Financial Holdings last month.
The threshold price is the minimum price that a resolution applicant must offer to participate in the first round of the challenge auction to acquire the company that is undergoing corporate insolvency resolution.
The auction for the financial services company of Anil Ambani’s
Group will be held on December 22-23, the people said. Previously, the auction was scheduled for December 19.
Lenders are holding the auction to narrow the wide gap between the highest offer they have received and the liquidation value.
The Piramal-Cosmea offer is 60% below the liquidation value pegged by independent valuers. If the lenders did not receive improved offers, they are unlikely to vote in favour of any of the plans that they have received last month, said a senior bank official.
Lenders received eight proposals of which four were for and its units and three were for specific units. UV Asset Reconstruction Co, which made the remaining proposal, offered to act as a recovery agent against a fee of 5% of the recovery.
Bidders must offer at least ₹1,000 crore over the threshold price – implying ₹7,500 crore – to be in the first round. The amount must go up by a minimum of ₹1,000 crore in the second round, ₹500 crore in the third round and ₹250 crore in the next.
Duff & Phelps and RBSA, the two valuers associated with the insolvency, have pegged the liquidation value in the range of ₹12,500 crore-13,000 crore.
Apart from Piramal-Cosmea, the
Group, Torrent Investments and Oaktree Capital are the bidders that have offered to acquire Reliance Capital and all its units.
Piramal-Cosmea’s ₹5,231 crore offer comprises Piramal acquiring Reliance General Insurance Co for ₹3,750 crore. Cosmea would acquire the remaining units for ₹1,481 crore.
The duo has offered ₹4,250 crore upfront and ₹981 crore at the end of the second year. Sam Ghosh, the founder-promoter of Cosmea Financial Holdings, headed Reliance Capital for almost nine years until 2017.
The Hinduja Group offered ₹5,060 crore, of which ₹4,100 crore is upfront payments and ₹20 crore each at the end of the third, fifth and seventh years. Torrent Investments offered ₹4,500 crore – ₹1,100 crore upfront and ₹3,400 crore over five years – while Oaktree Capital proposed to pay ₹4,200 crore with ₹1,000 crore of that upfront and ₹3,200 crore over five years.
