This week itself NARCL offered to acquire two loans – Meenakshi Energy and Helios Photo Voltaic Ltd, makers of solar energy – which triggered the Swiss Challenge auctions, the people said.
NARCL, often called the bad bank, has made a Rs 1003 crore anchor offer for Meenakshi Energy which is equivalent to a 28% return to lenders. For Helios Photo Voltaic Ltd, formerly known as Moser Baer Photo, the asset reconstruction company (ARC) has offered Rs 35 crore, which is equivalent to a 5% return to lenders.
Last month NARCL accelerated the pace of its operations after struggling for more than a year to get loans. It offered to buy six loans that triggered Swiss auctions. These include Jaypee Infratech, Mittal Corp, Consolidated Construction Consortium Ltd, SSA International, Meenakshi Energy and Helios Photo Voltaic Ltd. In total, it plans to acquire 18 accounts this quarter worth a total of ₹39,921 crore worth of debt, one of the people cited above said.
NARCL did not respond to ET’s request for comment.
Separately, it also offered a binding facility of Rs 110 crore to Rainbow Papers for Rs 1136 crore debt, which the lenders will soon put on the block, the people cited above said. Last week, it won Rs 9234 crore worth of Jaypee Infratech debt at an uncontested Swiss auction – marking its first acquisition.
In the case of another debt auction – Mittal Corp – lenders said the debt auction was a major success in improving recovery after NARCL gave an anchor offer of Rs 228 crore. It attracted a counterbid of Rs 405 crore from Kotak Mahindra Bank-backed Phoenix ARC, as reported by ET on October 29.
In the case of Meenakshi Energy, NARCL’s Rs 1003 crore loan offer of Rs 3619 crore is held by State Bank of India (SBI), Rural Electrification Corporation, Indian Infrastructure Finance Company, Punjab National Bank (PNB), PTC Financial Services, Bank of India, Union Bank of India, UCO Bank, Bank of Punjab and Sind and IDBI Bank. The lenders have appointed BDO India as consultants for the process and invited expressions of interest (EOI) on November 4. The lenders have specified that the counteroffer should be at least 6% more than the anchor offer.
ARC has offered Rs 35 crore of the Rs 614 crore loan to Helios Photo Voltaic held by SBI, PNB, Canara Bank and Union Bank. PNB Investment Services, the program advisor for Helios lenders, has determined that the counteroffering should be at least 8.5% above the anchor offer. Lenders invited EOIs on November 3 and scheduled a Swiss auction on November 23.
The sale of loans to NARCL began after a directive from senior officials of the finance department to bank chiefs in a meeting held in mid-September. The meeting was held by Sanjay Malhotra, secretary of the financial services department, and Dinesh Khara, chairman of SBI, among other bank CEOs, as reported by ET on September 19.
In the case of Meenakshi Energy and Helios, NARCL will have the first right to match the counteroffer, if any, under the Swiss auction. Both of these facilities are under the 15:85 structure where 15% of the consideration will be paid from the beginning, and the balance will be in the form of a security receipt that is paid when the loans are received.