Tag : setback

Mumbai (The Hawk): The highest bidder for RCAP assets, a partnership between Cosmea Financial and Piramal Group, has withdrawn from the bidding process, which is a big setback for the resolution process of Reliance Capital Ltd (RCAP). The committee of creditors' (COC) planned e-auction for Reliance Capital is set to take place on Wednesday, and the highest bidder's withdrawal on the eve of the auction has shocked Reliance Capital's lenders. The Cosmea-Piramal consortium, according to sources, has decided to withdraw from the resolution process because it believes that the parameters of the bidding process have been significantly changed, and that in order to begin participating, the base bid in the auction itself now requires a significant increase of roughly Rs 1,500 crore over and above the highest bid. The Net Present Value (NPV) of the Cosmea-Piramal settlement plan is Rs 1,500 crore less than the floor value for the auction set by the COC, which is Rs 6,500 crore. Additionally, the second and third rounds' increments in the auction process have each been set at extremely high values of Rs 1,000 crore. The amount established for round four is Rs. 500 crore, and the amount set for each round after that is Rs. 250 crore. Accordingly, the minimum bid amounts would be Rs 7,500 crore, Rs 8,500 crore, Rs 9,000 crore, and Rs 9,250 crore, respectively. The consortium considers it to be not just arbitrary and unreasonable, but also unrealistic and impractical. The bidders believe that lack of transparency, such as failing to reveal the highest bidder or the order in which bidders placed after each round, is incompatible with the nationwide electronic auction that the Indian government and state governments held for spectrum for the t ...