Omkara Asset Reconstruction Company has emerged as the winning bidder in an auction to acquire non-performing assets (NPAs) worth Rs 6,151.16 crore from the Stressed Asset Stabilisation Fund (SASF), according to a source aware of the development.
Omkara ARC and state-owned National Asset Reconstruction Limited (NARCL) were the front runners to acquire the NPA portfolio, the source added. Both NARCL and Omkara ARC had bid Rs 642 crore — the reserve price — to acquire the portfolio of NPAs. Following this, an inte se bidding took place between the two front runners and Omkara ARC increased its bid to Rs 652 crore, which resulted in it being declared the winner of the auction, sources added.
In May, SASF invited expressions of interest (EoIs) from interested parties to acquire Rs 6,151 crore worth of bad loans across 239 accounts, with a reserve price set at Rs 713 crore, thereby targeting a recovery of 11.59 per cent. It had appointed Ernst & Young LLP as the process adviser for assisting with the proposed assignment or sale of the NPA portfolio, according to an auction notice on its website.
Of the 239 accounts, 81 accounts include tangible securities and guarantees with a gross principal outstanding of Rs 2,179.51 crore, and the remaining 158 accounts include guarantees and claims with a gross principal outstanding of Rs 3,971.65 crore, the auction notice stated.
Initially, SASF received 18 EoIs from interested entities, including NARCL, Omkara ARC, Phoenix ARC, Prudent ARC, CFM ARC, and JC Flowers ARC, among others. However, it failed to garner any binding bid from the interested entities. Following a lack of binding bids, SASF revised its reserve price downwards for the portfolio to Rs 642 crore from Rs 713 crore earlier.
After the revision in reserve price, NARCL and Omkara ARC put in binding bids to acquire the portfolio of NPAs, and subsequently, an auction was conducted to determine the winning bidder.
SASF is a trust set up by the Indian government in September 2004 as settlor in the form of a special purpose vehicle to acquire by transfer the stressed assets of the erstwhile Industrial Development Bank of India (IDBI) and for managing these assets with a view to recovering the amounts due thereunder. The tenure of SASF shall come to an end by September 30, 2024.
An email sent to Omkara ARC did not elicit a response till press time.
What was on offer?
· 239 accounts with gross principal outstanding of Rs 6,151 crore
· 81 accounts include tangible securities and guarantees with outstanding of Rs 2,179 crore
· The rest include guarantees and claims with outstanding of Rs 3,971 crore
· SASF had set a revised reserve price of Rs 642 crore for the NPA portfolio
· Ernst & Young was appointed as the process adviser for the sale process
First Published: Aug 04 2024 | 4:52 PM IST
