LIC’s plan to sell its exposure in bonds worth Rs 3,400 crore issued by Reliance Capital (RCap) did not find any takers among asset reconstruction companies (ARCs), as the deadline to submit expressions of interest (EoIs) closed.
Multiple sources said ARCs did not find the option to buy bonds of the bankrupt firm attractive and decided to give it a miss. A source said IDBI Capital, which has been mandated to sell the bonds, will extend the deadline to July 22. The EoIs are to be followed by an auction to sell the bonds.
RCap was sent to bankruptcy court in November last year after the company defaulted on its loans to lenders, including Life Insurance Corporation of India (LIC) and several other banks and provident funds.
The RCap bonds are currently trading at a 70 per cent discount to the bond amount and have already made a big hole in investors’ pockets. If LIC or any other investor has to sell their bonds in the market, then they will recover around 30 per cent of their investment in the bonds.
