City Avenue Financial News

BEIJING — If U.S. regulation forces Chinese companies to delist from New York, new rules from Beijing further complicates their path to raising money in public markets abroad.

NARCL) for the debt-laden Jaiprakash Associates Ltd (JAL) has triggered a Swiss Challenge auction, with close to a dozen entities showing interest in acquiring the Noida-based conglomerate on an all-cash basis. Distressed aggregators such as the Kotak Mahindra Group-backed Phoenix ARC, US-based Ares Management Corp-backed Acre ARC (asset reconstruction company), Avenue Capital’s Arcil ARC and CFM ARC have expressed initial interest in submitting a bid, said senior executives of these entities. NBFC Capri Global and US-based alternative investment fund Cerberus Capital have also expressed interest, people familiar with the matter said. ET could not ascertain the names of all entities interested in the asset.

Bandhan Bank is selling its ₹775-crore affordable home loan portfolio to Avenue Capital-backed Asset Reconstruction Company India (Arcil) for ₹280 crore in an all-cash deal, said people with knowledge of the transaction. This transaction highlights the emerging stress in lower-income groups, where customers are unable to pay ₹10-12 lakh loans taken to buy their homes.

Failed cancer care provider GenesisCare, which entered Chapter 11 in June, says its lender group has extended up to $US68 million ($104 million) in new financing to help keep the business running as it aims to emerge from bankruptcy protection in January.

Muthoot Finance sold a gold loan portfolio of Rs 725 crore to Asset Reconstruction Company of India (Arcil) on a par, said two people with knowledge of the matter. This is the first time a gold loan portfolio is being sold by a lender to an asset reconstruction company (ARC). Most lenders prefer in-house recovery since the value of gold is adequate to cover the value of the loan disbursed. Muthoot did not take a significant haircut as gold value has appreciated and the transaction is structured in a way that upside would be shared by the Avenue Capital backed ARC with the finance company. Kerala-based Muthoot Finance sold the gold loan portfolio under the 15:85 structure wherein 15% of the consideration is paid in cash and the balance is in the form of security receipts. Muthoot Finance and Arcil did not respond to ET’s request for comments. Muthoot Finance has a leadership position in the gold loan business and gold loan portfolio is about 86% of its consolidated book, as on June 30, according to a report by Icra Ratings dated August 28. Muthoot’s gold loan book has more than doubled over the last five years to Rs 66,039 crore as of June 2023, Icra has stated. Most banks and finance companies have resorted to auctions of gold to recover their dues. In the fiscal years 2023 and 2022, gold loan auctions undertaken by Muthoot Finance stood at Rs 2,203 crore and Rs 5,211 crore, respectively.

Vidarbha Industries Power and deposited the ₹1,265-crore bid price, representing 49% recovery for the lenders. Vidarbha Industries is a subsidiary of Anil Ambani's Reliance Power.

Reliance ARC has submitted a writ petition against the Reserve Bank of India in the Bombay High Court opposing the Swiss challenge method during the debt sale of Vidarbha Industries Power, which has drawn interest from funds like Varde Partners-backed Aditya Birla ARC and Avenue Capital-backed Asset Reconstruction Company of India (Arcil). Vidarbha Industries Power, currently in bankruptcy and promoted by Anil Ambani, has a total debt of Rs 2,569 crore. Reliance ARC has challenged the central bank’s circular of September 24, 2021, calling it arbitrary as it confers “unwarranted and unreasonable benefit” in favour of a Prospective Transferee. The deadline for bidders to submit firm offers was August 8, but the hearing for that petition will take precedence, a bank source said. The matter could be taken up for hearing by the end of this week, another source said. In its petition, Reliance ARC has raised concerns over the Swiss Challenge Auction process, according to a lawyer source. The concern is that when an ARC makes a bid to buy a troubled asset or a non-performing asset (NPA), it automatically becomes an initial bidder and this gives the ARC the exclusive right to match any bid that comes in during the Swiss Challenge Process, the lawyer explained.

Vidarbha Industries Power has petitioned the Bombay High Court objecting to a decision by its lenders to auction the company's debt, court documents show. Banks led by Axis Bank have scheduled a Swiss Challenge auction to sell principal debt of ₹2,569 crore and $27.7 million in overseas currency loans of the distressed power company on August 8. Last month, lenders rejected a ₹1,260-crore one-time settlement the promoter offered and chose CFM Asset Reconstruction Company's ₹1,220 crore offer as an anchor bid for the Swiss auction.

Vidarbha Industries Power will hold a Swiss challenge auction on August 8 among the three shortlisted asset reconstruction companies (ARCs), said people aware of the development. Lenders have shortlisted Aditya Birla ARC, Avenue Capital-backed Asset Reconstruction Company of India (Arcil) and Reliance ARC as eligible candidates to submit counter offers for the sale of the distressed power company, the people said. Banks have preferred CFM Asset Reconstruction Company, an anchor bidder, to the promoter Anil Ambani group, for the proposed loan auction under a Swiss challenge mechanism, as first reported by ET.

portfolio with total loans of ₹1,800 crore to Kotak Mahindra Bank-backed Phoenix Asset Reconstruction Company (ARC) at an auction last week, said people aware of the development. The portfolio included six real estate accounts sold for ₹1,075 crore, equating to a 60% recovery for L&T Finance, the people said.