Kotak Mahindra Bank-backed Phoenix ARC is in talks with banks to acquire loans of VVF (India) Ltd, makers of personal care products such as Doy Care and Jo, said two people aware of the development.
Phoenix ARC has, last week, offered Rs 105 crore to Bank of India for its Rs 210 crore loans to VVF (India).
The offer, which equates to a recovery of 50% for the state-owned bank, has triggered a Swiss challenge auction which is scheduled for April 30. VVF (India) has borrowings of Rs 1,400 crore, according to a credit rating report by Crisil Ltd.
Last week, Bank of India invited bids for Rs 188.3 crore of fund-based and Rs 22 crore of non-fund-based, such as bank guarantees and letter of credit, exposure.
Phoenix ARC did not respond to ET’s request for comment.
The company was admitted for insolvency proceedings last September following a petition filed by Bank of India. However, within a month, the appellate authority ordered a stay on the formation of a committee of creditors, following an appeal by the company that it was in talks with lenders for an out-of-court settlement.
Unlisted VVF (India) is currently run by second-generation promoters Rustom Joshi, Shanaz Diwan and Faraz Joshi.
If it acquires Bank of India’s loans, Phoenix ARC would have a 30% share of the company’s loans. In the past, it had acquired VVF (India)’s loans from IDBI Bank and Axis Bank. The company’s other lenders include State Bank of India, Punjab National Bank, Central Bank of India and Bank of Baroda. Its bank facilities have a charge on holding company VVF Ltd’s assets, which include land holdings in Mumbai.
VVF (India) makes fatty oils, fatty alcohols and glycerine, which contribute to around 60% of the total revenue, according to a rating report by Crisil. It is among large manufacturers of oleochemicals with a unit at Taloja, Maharashtra. It also undertakes contract manufacturing of personal care products at its plants in Baddi, Himachal Pradesh; Kolkata; and Daman.
