NARCL offers to buy debt of three more bankrupt companies
NARCL) has offered lenders base bids for the bad loan accounts of Hitodi Infra, Sion Panvel Tollways and Morarjee Textile with total consolidated debt of more than ₹4,000 crore.
Based on binding bids from the government-backed bad bank, lenders have initiated a Swiss challenge auction for Hitodi Infra. The lenders, including Bank of Baroda, ICICI Bank, Axis Bank, Bank of India, IDBI Bank and State Bank of India, have appointed BoB Capital as the process advisor. NARCL has offered ₹465 crore for the outstanding loans of ₹2,101 crore.
The lenders have asked bidders to either bid in all cash or on a cash-and-security receipt basis. NARCL buys debt under a 15:85 structure where 15% is paid in cash and 85% in security receipts. The minimum markup will be 5% of the anchor bid. The Swiss auction will be held on March 26.
Security receipts are instruments issued by asset reconstruction companies for purchase of stressed debt and show the interest in the underlying assets.
Hithodi Infra is a company formed between Patel Engineering (PEL) and an Eight Capital Group entity, to reduce the debt burden of PEL, according to a Acuite Ratings and Research report.
Morarjee Textile, which has an integrated manufacturing plant in Nagpur, was admitted for bankruptcy by the National Company Law Tribunal Mumbai last month on an application by Axis Bank. The tribunal has appointed Ravi Sethia as the resolution professional. The company had debt of ₹405 crore, according to a Brickwork Ratings report of January 2021.
Sion Panvel
