Last week, National Asset Reconstruction Company Ltd (NARCL) made a binding bid of Rs 860 crore to acquire oil and gas exploration company VOVL’s debt, said two people aware of the development. VOVL’s lenders will ask NARCL To improve the offer as it is too low as compared to the offers of other bidders.
15% to be paid in cash in advance
“Once this deal closes, it will be marked as the largest single loan acquisition by any arch One of the lenders said, “Till date, VOVL Ltd which is undergoing corporate insolvency has verified financial claims of Rs 30,640 crore.
NARCL’s proposal has a 15:85 structure – 15% of the consideration will be upfront cash while the rest will be in security receipts (special representatives) payable in five years.
Although the government guarantees these SRs, the overall offering is as low as 3% of the claims of financial creditors.
NARCL did not respond to ET’s queries.
Praveen Navander, resolution professional at VOVL, received four resolution plans in September from Aneva Brazil, Twin Star Overseas, RKG Fund and . Petro Rio SA.
oil exploration company Aneva Brazil has offered Rs 2,800 crore, which is equivalent to 9% of the claims of financial creditors, as reported by ET on September 28. Twin Star Overseas owned by billionaire Anil Agarwal VedantaOffered Rs 1,200 crore, which is around 4% of the claim amount. Prudent Asset Reconstruction Company-owned RKG Fund-1 proposed a scheme of Rs 1,000 crore, while Petro Rio SA offered Rs 160 crore.
Brazil-based oil explorers Eneva Brazil and Petro Rio SA have bids for specific oil blocks.
twin star offer
Resolution of Affiliation of VOVL Videocon The industry is in limbo after lenders decided to restart the sale process. It was put on hold by the Supreme Court a year ago following a petition by the bidder, Twin Star Technologies.
Twin Star’s offer, equivalent to 5% of the claim amount, was at the center of a controversy involving Videocon Industries. Lenders are concerned about the same issue – too few bids – will be made for VOVL.
Since NARCL’s offer is much lower than offers received from others under insolvency proceedings, the boards of banks may not approve it unless the amount is increased, the lender said above.
If the boards of all banks approve NARCL’s proposal, the lender will hold a Swiss challenge auction inviting counter bids from other asset reconstruction companies. NARCL will have the first right to match any counteroffer.
In the past few months, NARCL has made binding offers for half a dozen companies, triggering the Swiss Challenge auction. it is included Jaypee InfratechMittal Corp, Meenakshi Energy, SSA International, integrated manufacturing Co. Ltd. and Helios Photo Voltaic Ltd.