BENGALURU (Reuters) – The highest bid India’s Reliance Capital, which is undergoing insolvency proceedings, received was 60% below its aggregate liquidation value, the Anil Ambani-led company’s administrator has let its lenders know, the Economic Times reported on Friday.
The Reserve Bank of India superseded the board of Reliance Capital last year, saying it would initiate bankruptcy proceedings against the firm after auditors raised several red flags around its results, including a lack of clarity in its accounting methodology.
The firm has since failed to make several debt and interest payments on debentures.
If the bidders fail to significantly raise their offers, there is a risk of liquidation or piecemeal selling of the assets as a going concern, the Economic Times reported, citing two people aware of the development.
Lenders are expected to hold one-on-one meetings with all eight bidders to discuss details and request them to improve the offers made until now, the newspaper reported.
Reliance Capital did not immediately respond to a Reuters’ email seeking comments.
Anil Ambani, the younger brother of billionaire Mukesh Ambani, forced a split in the conglomerate after his father Dhirubhai Ambani’s death in 2002.
Anil had won control of the power, financial services and the newly built telecoms business, but heavy debt load and competition has seen his companies shut down, or on the brink of liquidation.
($1 = 81.1400 Indian rupees)
(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Nivedita Bhattacharjee)
