LIC‘s move to sell its cash-strapped Reliance Capital Ltd (RCL) Rs 3,400 crore secured principal debt to an asset restructuring company (ARC) has angered its lenders and bidders. The last date to submit binding bids for Reliance Capital Ltd (RCL) and its subsidiaries are November 28.

LIC is conducting a Swiss challenge process inviting bids from asset restructuring companies (ARCs) to sell its exposure to RCL, the sources said, adding that potential bidders would be called for better offers.

However, the officials said that Asset Care and Reconstruction Enterprise would prioritize matching counteroffers. The last date to submit bids is November 25, while the deadline for submission of binding bids for RCL is November 28.

According to officials, RCL’s committee of creditors (CoC) is upset over why LIC has initiated parallel proceedings to sell its debt so close to the bid deadline. Officials said LIC, a member of the CoC, was trying to seal the deal three days before the binding bid deadline, rattling other members and bidders.

RCL offers two options to all bidders. Under the first option, companies can bid for Reliance Capital Ltd, including its eight subsidiaries or clusters. The second option allows bidders to bid for their subsidiaries individually or jointly.
RCL has eight companies on the block. These include general insurance, life insurance, health insurance, securities business and asset restructuring.

The Reserve Bank of India (RBI) replaced RCL’s board on November 29 last year due to payment defaults and serious governance issues. RBI has appointed Nageswara Rao Y as the company’s Corporate Insolvency Resolution Procedure (CIRP) administrator.

Reliance Capital is the third large non-banking financial company (NBFC) initiated by the central bank under the IBC in insolvency proceedings.

The other two are Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). The RBI subsequently applied to initiate CIRP against the company at the Mumbai court of the National Company Law Tribunal (NCLT).
In February, RBI-appointed administrators invited expressions of interest for the sale of Reliance Capital.