State-owned National Asset Reconstruction Company Ltd. (NARCL), which had placed the anchor bid for the State Bank of India-led consortium’s non-performing loans (NPLs) in Jaiprakash Associates Ltd. (JAL), has emerged as the sole bidder to acquire the assets, after no counterbids were received from any other interested entities, sources said.
NARCL has made an offer of Rs 12,000 crore to acquire the debt of 25 lenders on a 15:85 cash: security receipts basis, triggering the Swiss challenge auction. NARCL’s anchor bid would translate into a recovery of 23 per cent for the lenders. Previously, NARCL had offered Rs 10,000 crore to take over the lenders debt in the company but it upped its offer to Rs 12,000 crore subsequently.
Consequently, SBI had invited counter bids from entities interested in acquiring bad debt of Rs 52,074 crore in JAL through the Swiss challenge auction. Counterbids were invited on a full cash basis, with a markup of Rs 600 crore. This meant that any entity interested in submitting a counter bid had to offer at least Rs 12,600 crore on a full cash basis.
Among the lenders, SBI has the highest exposure with Rs 15,464 crore, followed by ICICI Bank with Rs 10,443 crore, IDBI Bank with Rs 8,718 crore, LIC with Rs 3,021 crore, and Axis Bank with Rs 3,084 crore.
Other lenders in the consortium include ICICI Bank, IDBI Bank, Axis Bank, Canara Bank, Punjab National Bank, Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Indian Bank, Bank of India, Central Bank of India, Standard Chartered Bank, Punjab & Sind Bank, South Indian Bank, J&K Bank, Karur Vysya Bank, IndusInd Bank, Exim Bank, Bank of Baroda, Union Bank of India, Life Insurance Corporation, SIDBI, and IFCI.
IDBI Capital Markets & Securities Ltd. has been appointed as the process advisor on behalf of the consortium of lenders for the sale process.
JAL was part of a list of 30 companies that were directed by the Reserve Bank of India to be referred to the National Company Law Tribunal (NCLT) in August 2017. This was the second list put together by the regulator, and Jaypee Infratech, the group’s infrastructure subsidiary, had already featured on the first list of 12 large corporate accounts for immediate insolvency action in June 2017, a list that came to be known as “The Dirty Dozen”.