After the National Company Law Appellate Tribunal (NCLAT) allowed lenders of Reliance Capital to conduct the extended Challenge Mechanism, Torrent Investments has filed a plea in the Supreme Court challenging the order.
The plea was filed on Tuesday against Vistra ITCL, the debenture trustee acting on behalf of the 90 per cent of the committee of creditors (CoC). Vistra had dragged Torrent Invest to NCLAT after the NCLT on February 2 had ruled in favour of Torrent.
The plea is likely to admitted in the coming week as the CoC has proposed holding the extended Challenge Mechanism on March 20 as per the NCLAT order which asked to CoC to conduct the second auction after a two-week period.
Threshold bid
The CoC has proposed setting the threshold bid amount for participating in the extended challenge mechanism at ₹9,500 crore on an NPV (net present value) basis. The threshold will increase by ₹500 crore for the second round to ₹10,000 crore and by ₹250 crore each for the third and every subsequent round.
The minimum upfront cash component for bidding under the extended challenge mechanism and Round 1 has been set at ₹8,000 crore.
The NCLAT had, on March 2, set aside the February 2 order of the Mumbai Bench of the NCLT, thus allowing the CoC of Reliance Capital to hold the second challenge mechanism, and to take “any steps for further negotiations with the Resolution Applicants”.
A two-member Bench had held that the CoC “is fully empowered” to further negotiate with one or more resolution applicants, even after completion of challenge mechanism on December 21 when Torrent Investments emerged as the highest bidder with an NPV of ₹8,640 crore.
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