Union Bank invites EoIs to sell Rs 2,316 crore NPAs across 45 accounts

Some of the accounts in the list include those which went unsold in an auction in June

State-owned Union Bank of India has invited expressions of interest (EoIs) from entities interested in acquiring non-performing assets (NPAs) totalling Rs 2,316 crore of 45 accounts through an open auction on August 23.

The bank has set a reserve price for the accounts and is expecting a recovery of over Rs 1,750 crore, or around 75 per cent of the principal outstanding of these accounts.

The bank has invited EoIs from asset reconstruction companies (ARCs), banks, non-banking financial companies (NBFCs), financial institutions (FIs), and alternative investment funds (AIFs) by August 22.

After this, the bank will invite binding bids on a full-cash basis through the e-auction on August 23. The highest bidder will be declared soon after.

Further, the bank will conduct a Swiss challenge auction on August 31 for accounts which receive single bids during the e-auction, as well as for accounts which receive more than one bid.

For the Swiss challenge auction, EoIs have to be submitted by August 30. Subsequently, during the Swiss challenge auction, the interested entities would have to bid 5 per cent more than the highest bid amount received during the e-auction.

Some large players in the list of the 45 accounts include Leo Meridian Infra Projects, with an exposure of Rs 263.53 crore; Sahara Hospitality, with an exposure of Rs 261.90 crore; Panduranga Energy Systems, with an exposure of Rs 230.26 crore; Hotel Horizon, with an exposure of Rs 212.68 crore; Radius Infratel, with an exposure of Rs 110 crore, and AJS Impex, with an exposure of Rs 108.82 crore.

Interestingly, the list contains some of the accounts which went unsold in the previous auction conducted by the bank in June. These are Leo Meridian, Nirmal Lifestyle, Phadnis Properties and Paramount Steels, among others.

In June, the bank had invited bids from entities interested in acquiring 25 NPAs with a total outstanding of around Rs 1,268 crore.

The bank received bids for only five of the 25 accounts it had put up for sale and the rest of the accounts did not attract any bids. This was due to the high reserve prices set by the bank.

Subsequently, the bank had called for a Swiss challenge auction where only Jaypee Healthcare attracted a counterbid.

In the quarter ending June 2024 (Q1 FY25), the state-owned bank’s gross NPAs stood at Rs 41,423 crore, down almost 4 per cent sequentially. Net NPAs stood at Rs 7,902 crore, down 12.1 per cent sequentially.

Its gross NPA ratio improved to 4.54 per cent and net NPA ratio stood at 0.90 per cent.