Sumeet Industries' lenders ask initial bidder to raise offer
Lenders to the debt-laden textile company Sumeet Industries are in negotiations with the Gujarat-based Gajera Group to improve its offer after its initial bid to take over the company was bettered by Geelon Industries, three people familiar with the matter said.
Banks are seeking more than ₹250 crore for the company in an all-cash deal, higher than the ₹221 crore offered by Geelon, these people said.
Sumeet has been classified as a non-performing account (NPA) with banks for more than three years. It owes lenders led by the Bank of Baroda (BoB) more than ₹900 crore including about ₹530 crore in principal.
Lenders expect to recover at least 47% of their principal dues by asking Gajera to better its offer.
«Lenders see a good chance of improving the offer on the table now. Both Geelon and Gajera are interested.
But Gajera by virtue of being the highest bidder in the auction gets the first shot at improving his offer,» said a person aware of the process.
Helmed by diamond trader Chunibhai Gajera, the group has interests in real estate and education besides diamonds. It had offered just below ₹200 crore in the initial bids in July.
Subsequently, lenders have started negotiations with individual bidders resulting in Silvassa-based Geelon Industries improving its offer to ₹221 crore which comes to about a 42% recovery for lenders.
Sumeet was admitted for bankruptcy proceedings in December last year, after a failed attempt to restructure its loans.
BoB is the largest creditor to the company with a 65% share of the company's dues to financial creditors, followed by IDBI Bank (21%). Other lenders are Central Bank of India, Canara Bank, Union Bank of India and Germany-based Oldenburgische Landesbank AG.
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