This week itself NARCL has offered to get two loans – Meenakshi Energy and Helios Photo Voltaic Ltd., Manufacturer of solar energy equipment – Due to which the auction of Swiss Challenge has started, people said.
NARCL, often referred to as Bad Bank, has made an anchor offer of Rs 1003 crore Meenakshi Energy Which equates to a recovery of 28% for the lenders. Asset Reconstruction Company (ARC) has made an offer of Rs 35 crore for Helios Photo Voltaic Ltd, formerly known as Moser Baer Photo, which equates to 5% recovery to lenders.
Last month, NARCL ramped up its activities after struggling for over a year to secure bad loans. It has offered to buy six loans, triggering a Swiss auction. it includes Jaypee InfratechMittal Corp., Integrated Construction Consortium Ltd.SSA International, Meenakshi Energy and Helios Photo Voltaic Ltd together, plan to acquire a total of 18 accounts this quarter, totaling ₹39,921 crore in debt, said one of the persons mentioned above.
NARCL did not respond to ET’s request for comments.
Separately, it has also made a binding offer of Rs 110 crore for Rainbow Papers on a loan of Rs 1136 crore, which the lenders will block soon, the people mentioned above said. Last week, it won Jaypee Infratech’s Rs 9234-crore debt in an uncontested Swiss auction – marking its first acquisition.
In the case of another loan sale- Mittal Corp-Lenders said that the loan auction was highly successful in improving recovery after NARCL offered anchor offer of Rs 228 crore. It attracted an impedance of Rs 405 crore from Kotak Mahindra Bank-backed Phoenix ARC, as reported by ET on October 29.
In the case of Meenakshi Energy, NARCL’s offer of Rs 1003 crore is on a debt of Rs 3619 crore state Bank of India (State Bank of India), Rural Electrification CorporationIndian infrastructure finance company, Punjab National Bank (PNB), PTC Financial Servicesbank of india, Union Bank of India, UCO BankPunjab and banks are And IDBI Bank, The lenders have appointed BDO India as process advisor and have invited Expression of Interest (EoI) by November 4. Lenders have stipulated that the counter offer must be at least 6% higher than the anchor offer.
ARC has offered Rs 35 crore for Helios Photo Voltaic’s Rs 614 crore loan with SBI, PNB. Canara Bank and Union Bank. PNB Investment Services, process advisor to lenders of Helios, has stipulated that the counter offer should be at least 8.5 per cent higher than the anchor offer. Lenders have invited EoIs by 3 November and Swiss auction is scheduled for 23 November.
The sale of bad loans to NARCL began following instructions given to bank heads by senior finance ministry officials in a closed-door meeting held in mid-September. The meeting was chaired by Sanjay Malhotra, Secretary, Department of Financial Services, and attended by SBI Chairman Dinesh Khara along with other bank CEOs, as reported by ET on September 19.
In the case of Meenakshi Energy and Helios, NARCL will have the first right to match the counteroffers, if any, under the Swiss auction. Both the offers are under 15:85 structure, with 15% consideration to be paid upfront, and the balance in the form of security receipt payable on recovery of the loan.