sales non-performing assets ,NPA) to the National Asset Reconstruction Company (narco), the government-promoted bad bank has finally come up with a proposal for loans to troubled people with the newly formed ARC. steel maker mittal corpTriggering a Swiss Challenge auction.

NARCL has offered ₹228 crore for Mittal Corp loan held by the public sector banks (PSB) totaling ₹1,414.5 crore, said people aware of the development. This equates to a recovery of 16% for these lenders.

Lenders have put the loan on the block. NARCL reserves the right to reconcile any counteroffers.

State-owned banks account for about 89% of Mittal Corp’s outstanding loans, while the remaining 11%, or ₹173 crore, is with Asset Care and Reconstruction Enterprise (ACRE), an ARC backed by Ares SSG Capital. NARCL’s offer would be equivalent to ₹256 crore if it includes claims from ACRE. Its anchor offer is a combination of 15% cash payment and as the remainder security receipts (SR) Guaranteed by Govt.

NARCL did not respond to ET’s request for comment till press time on Monday.

According to a bidding document released by their process advisor, the lenders have invited expressions of interest by October 6, and the Swiss auction is on October 20. PNB Investment Services,

Banks expect at least two counterbids in the Swiss auction, the people cited above said.

Lenders have stipulated that any counterbid should have a mark-up of at least 6% on the anchor offer, which is equivalent to ₹242 crore. Challenger bidding can be in cash or a combination of cash and SR. Although, as per the offer document, the SR has to be guaranteed by a ‘First Class Bank’, it has not defined ‘First Class Bank’.

NARCL’s offer, equivalent to ₹256 for the entire loan, is much lower than ₹282 crore offered by Rimjhim evidence Mittal Corp, which is currently undergoing insolvency proceedings.

The National Company Law Tribunal (NCLT) ordered lenders to end voting on resolution plans mid-way and invite fresh proposals following a petition filed by Shyam. sel End Power, another bidder, promising a better offer. drizzle steel and Jindal Stainless Steel, another company that has bid for Mittal Corp under insolvency proceedings, has moved the appellate tribunal against the NCLT order.

Shyam SEL had offered ₹257 crore in the bid, while Jindal Stainless Steel had offered ₹251 crore.