Kotak Mahindra Bank-backed Phoenix Asset Reconstruction Company emerged as the highest bidder for Mittal Corp at a Swiss challenge auction, triggered by a binding bid from the government-promoted bad bank, said two people aware of the development.
At the auction held on Thursday, Phoenix ARC made a Rs 405 crore bid for the bankrupt steel maker, against the anchor offer of Rs 228 crore from National Asset Reconstruction Company Ltd (NARCL) given in the first week of October, the people said.
Bankers said their recovery from the company will significantly improve, mainly because of the anchor offer from NARCL that triggered the Swiss auction.
“Prudent ARC too participated in the auction process, but it exited after making a last bid of Rs 392.1 crore,” a person cited above said.
Phoenix ARC did not respond to ET’s request for comment. Prudent ARC declined to comment.
NARCL will have 15 working days to decide on whether it wants to match the highest offer.
The offer from the government-promoted ARC is under the 15:85 structure, while Phoenix ARC has given an all-cash bid. Under the 15:85 structure, 15% of the consideration is paid upfront and the balance will be in the form of security receipts payable on recovery of loans.
Mittal Corp, which is undergoing corporate insolvency, is saddled with litigation after the bankruptcy court permitted the resolution professional to invite fresh offers to maximise recovery.
The RP, Shailendra Ajmera backed by EY, conducted the Swiss auction to maximise the value for lenders.
Earlier, lenders had received the highest offer of Rs 283 crore from Rimjhim Ispat, followed by bids of Rs 257 crore from Shyam SEL & Power and Rs 251 crore from Jindal Stainless Ltd.
Within days of the RP inviting lenders to vote on those offers in August, the National Company Law Tribunal (NCLT) directed the RP to halt the voting process and reinvite offers following a petition from Shyam SEL. In a revised offer made in August, Shyam SEL offered Rs 284 crore, or Rs 1 crore higher than the highest bid.
Jindal Stainless and Rimjhim Ispat appealed against the NCLT’s order at the appellate tribunal. Hearing is yet to conclude.
