Banking News

NARCL’s offer for Entertainment City debt pegs recovery at 95%


Mumbai: The government-backed bad bank has offered ₹711 crore to acquire the debt of Entertainment City – which operates The Great India Place mall in Noida and theme park Appu Ghar in Delhi. The offer translates to a 95% recovery for its sole lender, Punjab National Bank, said people with knowledge of the matter.

The National Asset Reconstruction Co (NARCL) offer for the ₹751 crore debt has triggered a Swiss challenge auction scheduled on March 1.

This is the highest recovery offered by NARCL to any lender, which reflects the bad bank’s aggression in acquiring stressed loans, said a senior official from an ARC. In the past, NARCL’s offers ranged from 5% to 35%.

“The bid-ask range between banks and NARCL has also narrowed, resulting in lenders selling them several loans recently,” the same person said.

PNB has said that any counteroffer must be at least ₹40 crore higher than the anchor bid of ₹711 crore. It should be a cash offer or a combination of cash and security receipts. However, a commercial bank should guarantee the security receipts from the private ARC.

The offer by NARCL is a combination of cash and security receipts wherein 15% of the consideration is paid in cash, and 85% is a security receipt paid in five years or on recovery of debt, whichever is earlier.

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