IFCI looks to sell ACCIL's bad loans worth ₹869 cr via Swiss auction

IFCI invites counter-bids for Rs 869 crore of bad loans from ACCIL after receiving an anchor bid of Rs 50 crore, translating into a recovery of just 5.75%

State-owned IFCI has put bad loans worth ₹869 crore of Asian Colour Coated Ispat Limited (ACCIL) on sale, inviting counter-bids after receiving an anchor bid of ₹50 crore. This translates to a recovery of just 5.75 per cent for the lender.

 

IFCI will conduct a Swiss challenge auction on September 26. The counter bids have to be on 100 per cent cash basis. Expression of interests (EoIs) by interested entities have to be submitted by September 9.

 

Against its exposure, IFCI holds exclusive mortgage of the 78-room ‘Park Plaza’ hotel property in Faridabad, Haryana — owned and mortgaged by ACCIL Hospitality, an escrow on the hotel’s cash flows, a corporate guarantee from ACCIL Hospitality, and personal guarantees from board directors Vikas Aggarwal and Pradeep Aggarwal.

   

ACCIL was part of the Reserve Bank of India’s second list of 28 defaulters that banks were to refer to insolvency courts. The company runs a cold rolling mill complex for manufacturing cold rolled, galvanised and colour-coated products for the automobile, white goods and general engineering sectors.

 

It has been resolved under the corporate insolvency resolution process of Insolvency and Bankruptcy Code.

 

In October 2020, JSW Steel completed the acquisition of ACCIL through JSW Steel Coated Products, a wholly owned subsidiary of the company. JSW Steel has offered over ₹1,550 crore for the steel plant. ACCIL had an outstanding debt of ₹5,000 crore from various lenders.

 

If IFCI does not receive any EOI by September 9, it will conclude the Swiss challenge process and declare the anchor bid of ₹50 crore as the winning bidder.

 

However, in case there are challenger bids for the stressed loans, the anchor bidder will get the chance to match the challenger bid. In this case, the bid made by the anchor bidder will be preferred and accepted by IFCI.