RCap bond sales deadline extended to July 22

A move by Life Insurance Corporation of India (LIC) to sell secured bonds of Reliance Capital (RCap) worth Rs 3,400 crore did not receive any bids from prospective buyers after the deadline expired on Monday. The insurer now has extended the deadline by another 11 days to July 22.

“There were no takers for the bonds as of the end of the day, following which a decision was taken to extend the deadline further. This also followed requests from certain quarters to extend the final date for submitting the bids,” a source close to the development said.

LIC has been trying to sell the bonds, now trading at 70% discount, since July 2021. The insurer had made two attempts earlier, which had failed as it could not arrive at a price consensus with prospective buyers. RCap is currently undergoing insolvency proceedings, with the creditors of the former Anil Ambani group company seeking Rs 23,666 crore in dues.

IDBI Capital Markets, the advisor to the bond sale, had earlier invited expressions of interest (EoIs) from prospective bidders. According to the EoI, bidders were to be finalised through an auction process.

LIC was expecting to recover at least 30% of the bond amount as it expects a number of prospective buyers to submit their bids before the expiry of the new deadline. The insurer had gross non-performing assets of about Rs 35,130 crore as of March 31, 2021, according to its available annual report.

Last year, certain bondholders – including Axis Bank and HDFC – had sold off their bonds to asset reconstruction company, Assets Care and Reconstruction Enterprise.

On July 1, the deadline for submitting resolution plans for its insolvency process was extended by a month to August 10, after five prominent bidders backed out of the race. This was the fourth-time the submission date was extended, while the date for completion of the resolution process would be the earlier-decided November 2.

The lenders took the call to extend the date following requests from several existing bidders for “more time” to complete the due diligence process. The prospective bidders also cited lack of sufficient data to conduct verification of the entities under the Corporate Insolvency Resolution Process, sources had told FE earlier.