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Independent valuers give liquidation value of Rs 13,000 cr for Reliance Capital
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IANS | 01 Dec, 2022
The Reliance Capital Administrator, in the COC meeting held on Wednesday
presented the valuation reports of the Independent valuers - Duff &
Phelps and RBSA, to the lenders.
According to sources,
Independent valuers Duff & Phelps and RBSA have given a Liquidation
Value of Rs 13,000 crore for Reliance Capital.
In comparison,
four bidders have quoted merely 30 per cent of the Liquidation Value,
making it imminent for Reliance Capital to be referred for liquidation.
As
per the valuation report by Duff and Phelps, the Liquidation Value of
Reliance Capital is estimated at Rs 12,500 crore, while the Liquidation
Value arrived at by RBSA is Rs 13,200 crore.
In
comparison, the highest bid value received by the lenders of Reliance
Capital is Rs 5,231 crore from the consortium of Cosmea Financial and
Piramal Group.
Hinduja, with a bid value of Rs 5,060
crore is the second highest bidder for RCAP. The size of Torrent and
Oaktree bids is Rs 4,500 crore and Rs 4,200 crore, respectively.
Hence,
the bids received by the RCAP lenders are almost 30 per cent of the
liquidation value fixed by the two Independent valuers.
The
low bid value compared to the liquidation value fixed by the
independent valuers makes it imminent for the company to be referred for
liquidation.
In addition to the RCAP CIC, both the
independent valuers have assigned a liquidation value to RCAP's Life and
General Insurance businesses, too.
According to Duff
and Phelps' valuation report, the Liquidation Value of Reliance General
Insurance is Rs 7,000 crore, and Reliance Life Insurance business is Rs
4,000 crore.
On the other hand, RBSA has given a
liquidation value of Rs 7,500 crore and Rs 4,300 crore for Reliance
General Insurance and Reliance Life Insurance, respectively.
The
RCAP lenders have not received any bids for these two businesses
(General and Life Insurance) of the company, which account for over 90
per cent of the total valuation.
The lenders have
received three bids for the rest of the businesses/clusters like
Securities, Real Estate, ARC, etc. of Reliance Capital.
The
combined bid value of these businesses is Rs 120 crore, but as per the
valuation reports of Duff & Phelps and RBSA, the Liquidation Value
of these businesses is estimated at Rs 280 crore and Rs 240 crore,
respectively.
Keeping in mind the huge gap between the
LV and the actual bid values, the COC has decided to reject all the bids
and is considering the liquidation of Reliance Capital and its
subsidiaries, under Regulation 6(A) of the IBC Code. Introduced in
September this year, section 6(A) of the IBC allows the COC to liquidate
the multiple businesses of Reliance Capital separately.
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