Lenders appoint SBI Caps as advisor for Rs 2,000 cr debt resolution of VIPL

Lenders of Vidarbha Industries Power Ltd (VIPL), a subsidiary of Reliance Power, have appointed SBI Caps as an advisor for its debt resolution process, sources said.

As per the terms of reference, SBI Caps will invite bids for the sale or one time settlement (OTS) of VIPL debt.

It will also lay down evaluation criteria and recommendations for the anchor bidder.

SBI Caps will follow a fair and transparent process to ensure the resolution of VIPL's over Rs 2,000 crore outstanding debt, said a source close to the development.

The responsibility of conducting the Swiss Challenge process to maximise the recovery for lenders will also lie with SBI Caps, they said.

The deadline to complete the resolution process by SBI Caps is September 30.

The terms of reference say that SBI Caps, while executing the process, will ensure compliance with the RBI guidelines of June 8, 2023, for the sale of VIPL debt and OTS.

The appointment of SBI Caps comes at a time when VIPL lenders have received three suo moto bids for the sale and OTS of VIPL debt.

Reliance Power, the promoter of VIPL, has made an OTS offer to the lenders of VIPL.

Reliance Power's all-cash offer of Rs 1,260 crore is supported by the Varde Partners of Singapore.

Ahmedabad-based CFM Asset Reconstruction and NARCL are the other two bidders in the fray.

But, CFM ARC's Rs 1,220 crore all-cash offer is lower than RPower's offer of Rs 1,260 crore.

The third bidder, NARCL's offer of Rs 1,120 crore is significantly lower than RPower's OTS offer, as it is offering only 15 per cent in cash, while the rest will be paid over 5 years. The Net Present Value (NPV) of NARCL's offer is only Rs 850 crore.