IDBI Capital Markets & Securities on Monday invited counter-bids from interested entities to acquire Rs 755 crore of bad debts (NPAs) from a consortium of eight banks led by state-run Canara Bank in Shri Govindraja Mills Pvt Ltd, through a Swiss challenge auction.
According to sources familiar with the situation, the state-owned National Asset Reconstruction Company (NARCL) has submitted the base bid, on the basis of which IDBI Capital Markets has called for the Swiss auction. NARCL’s bid is now the base bid for the auction.
The consortium of lenders includes Indian Bank, State Bank of India, DBS Bank, Punjab National Bank, Bank of Maharashtra, Karur Vysya Bank and City Union Bank, besides Canara Bank.
Interested entities to acquire the NPAs (including asset reconstruction companies, banks, non-banking financial companies and financial institutions across India) have to submit their expressions of interest (EoI) for counter-bids by September 21, according to an auction notice, which was published in a major financial daily on Monday.
Shri Govindraja Mills, based in Tamil Nadu, is engaged in manufacturing of cotton and polyester blend yarn like polyester viscose yarn used for knitting and weaving.
“The lenders will not bear any operational, legal or any other risk in connection with the loan exposure and will not provide any representation or guarantee to Shri Govindraja Mills,” the auction notice said.
If IDBI Capital Markets does not receive any counter-offers for the asset for sale, NARCL will be declared the successful bidder. However, if a counter-offer is received that exceeds NARCL’s base bid, NARCL will have the opportunity to match the counter-offer; if it fails to do so, the counter-bidder will be declared the successful bidder.
NARCL is considering distressed debt acquisitions totalling Rs 1.25 trillion, with bids for assets at different stages of acquisition and due diligence in FY25. In the current financial year, NARCL had floated a Rs 360 crore bid to acquire the debt of 11 lenders led by Indian Overseas Bank (IOB) from Delhi-based Agson Global Pvt Ltd. NARCL has been on a debt acquisition spree since last year. It has acquired around Rs 92,000 crore of distressed debt from 18 accounts till March 31, 2024.
An email sent to NARCL went unanswered as of press time.
First published: September 16, 2024 | 20:05 IS
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