On August 17, Union Bank floated a tender for cash advance inviting bids for the power company’s Rs 2,077 crore loan at a reserve price of Rs 919 crore, up from the Rs 935 crore reserve price set in mid-July. where it failed. To attract any offer. Union Bank’s revised reserve price is equivalent to the recovery of 44 paise on Re.
People said though the bank received half a dozen expressions of interest from asset reconstruction companies (ARCs), it did not attract firm bids in the auction held on September 1. A senior ARC official said, “Some ARCs may arrange for an advance payment of around Rs 900 crore, and that could lead to a bad response.”
The development comes less than a month after KSK sold its debt to Mahanadi Power. Aditya Birla Asset ARC, The bid was supported financially by Verde Partners, which has a 50% stake in ARC. This is the biggest sale of distress loans by any bank where the focus is on advance payment.
In July,
According to an ET report on August 12, a debt of Rs 3,815 crore in the thermal power company was sold for Rs 1,622 crore, which is equivalent to recovery of 42 paise on Re 1.
Aditya Birla ARC has also obtained loan from thermal power producer
, and in the last two years. The ARC now controls 34% of the company’s debts, a critical level required under the Insolvency and Bankruptcy Code (IBC) because a proposal would not be approved if 34% of lenders voted against it.
In Chhattisgarh, the crisis-ridden thermal power generator operating three units of 600 MW is under insolvency process for nearly four years. The delay in resolution prompted lenders to exit by selling their exposures to ARCs.
Naveen Jindal’s Jindal Power, Dharampal Jindal’s Jindal Polymers, and iLabs India Special Situation Fund are the applicants who have submitted an expression of interest for the acquisition of the company.
However, a series of litigation delayed the resolution process. The National Company Law Appellate Tribunal (NCLAT) had stayed the resolution process following a plea by asset reconstruction company ASREC that optimum recovery in KSK Mahanadi is possible only if it undergoes group resolution.