LIC is conducting a Swiss Challenge process to invite bids from Asset Reconstruction Companies (ARCs) to sell its exposure in RCL, sources said, adding prospective bidders will be asked to better the offer.
However, the sources said, Asset Care and Reconstruction Enterprise will have the first right to match the counteroffer.
The last date to submit the bids is November 25, while the deadline for submission of binding bids for RCL is November 28.
According to the sources, the Committee of Creditors (CoC) of RCL are upset as to why LIC has initiated a parallel process to sell its debt so close to the bids submission deadline.
LIC is a member of the CoC and this attempt to finalise a transaction 3 days before the binding bids deadline has upset the other members and bidders, the sources noted.
RCL had offered two options to all the bidders. Under the first option, companies could bid for Reliance Capital Ltd, including its eight subsidiaries or clusters. The second option gave the bidders the freedom to bid for its subsidiaries individually or in a combination.
RCL has eight businesses that are on the block. These include general insurance, life insurance, health insurance, securities business and asset reconstruction, among others.
The Reserve Bank of India (RBI) had on November 29 last year superseded the board of RCL in view of payment defaults and serious governance issues.
The RBI appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm.
Reliance Capital is the third large non-banking financial company (NBFC) against which the central bank has initiated bankruptcy proceedings under the IBC.
The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL). The RBI subsequently filed an application for initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal (NCLT).
In February this year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital.
