The National Asset Reconstruction Company (NARCL), the state-sponsored bad bank, closed its second purchase of bad debt by acquiring Helios Photovoltaic, earlier known as Moser Baer Photo, two people aware of the matter told ET.
The government-backed bad debt company paid ₹35 crore for the ₹614 crore of bad loans, equating to a recovery of 5% for lenders. PNB Investment Services was the process advisor for lenders led by the State Bank of India, PNB, Canara Bank and Union Bank of India.
Based on the anchor bid from NARCL, PNB Investment Services had run the Swiss Challenge auction and asked interested bidders to bid at a markup of 8.5% to NARCL’s offer. However, no counter bids came under the Swiss Challenge.
A NARCL spokesperson did not comment.
NARCL has bought the debt under the 15:85 structure, where it has paid 15% in cash and the remaining in security receipts. These SRs are guaranteed by the government.
NARCL has been buying debt of bankrupt companies from banks. In January, it closed a large acquisition of Jaypee Infratech’s debt of ₹9,234 crore for ₹3,570 crore.
In another case, based on NARCL’s bid for Mittal Corp, lenders had initiated a Swiss challenge auction and then sold the debt to Phoenix ARC. Phoenix had offered to buy Mittal Corp for ₹405 crore against NARCL’s bid of ₹228 crore.
NARCL, which is majorly owned by public sector banks, is aggregating and consolidating select stressed assets of over ₹500 crore each. Along with NARCL, India Debt Resolution Company (IDRCL), where private sector banks own a majority stake, has been set up to resolve these stressed assets.
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