Mukesh Ambani-led Reliance Industries Ltd. (RIL) is reportedly all set to compete with Gautam Adani-led Adani Enterprises at an auction. The auction, which is scheduled to take place on November 25, is for the distressed thermal power firm Lanco Amarkantak Power. As per a report, the Lanco unit is already undergoing insolvency but will now see the billionaires compete.
According to a report in the Economic Times, the Reliance vs Adani competition for Lanco unit auction is the possibly the first time that the country’s biggest corporate houses will pit against each other for an asset. It adds that a consortium of Power Finance Corp. (PFC) and REC Ltd., will also be a part of the auction.
Since RIL is already present in a dominant capacity in various sectors, this bid, if successful would also mean the Mukesh Ambani-led company’s entry into the thermal sector. As per the report, in the first round of resolution plan, Reliance was also the highest bidder but in the second round, it was Adani that took the spot.
However, since Adani reportedly made a bid of Rs 2,950 crore in the second round, this offer will be the base price for the upcoming auction on November 25.
As per the ET report, The Insolvency and Bankruptcy Code (IBC) guidelines do not prevent debt holders from bidding for a company undergoing corporate insolvency. With regards to this, the report adds that since PFC and REC jointly hold 41 per cent of the debt in the company, they would play the role of seller and buyer.
