Banking News

NARCL makes binding offers for over half a dozen accounts: Sources

MUMBAI: The state-promoted National Asset Reconstruction Co (NARCL) has bid for more than half a dozen distressed loans, sources familiar with the matter told ET. NARCL has offered binding offers to lenders for the acquisition of loans, including two special purpose vehicles (SPVs) of Sadbhav Engineering – Rohtak Hissar Tollway and Rohtak Panipat.

Also, NARCL has upped the bid for Haridwar Highways Project. However, the fate of these offers hinges on lenders’ approval, which, if granted, will trigger a Swiss challenge auction.

NARCL is set to acquire loans of Simplex Infra following an uncontested Swiss auction. The state-backed bad bank has made a binding offer of ?640 crore for debt-laden engineering, procurement, and construction company Simplex Infrastructure, which is less than 7% in recovery to lenders. Simplex owes lenders, led by Punjab National Bank (PNB), a total of Rs 9,600 crore and is one of the largest accounts to be referred to bankruptcy courts in recent times. NARCL is preparing to acquire the loan in cash and security receipts (SRs).

“Over the last year NARCL has given bids for over two dozen accounts but banks have not moved ahead with the process to call Swiss challenge,” said a source. “The government is prodding NARCL to acquire a lot more but the actual purchase depends on banks’ taking a call by triggering Swiss Challenge on these accounts.”

The source added NARCL is also doing due diligence on more than 15 stressed loans. For some of the loans such as EPC companies, which typically lack tangible fixed assets for valuation and the delay in NCLT process, bankers are deliberating whether a sale to asset reconstruction company (ARC) is a preferable alternative.

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